New York House Republicans criticized Senate GOP leaders on Monday for allegedly supporting a plan to maintain the $10,000 cap on state and local tax deductions, which could jeopardize President Donald Trump’s signature tax bill before it even reaches the Senate floor. This move revealed a new Republican rift over taxes.
The Senate Finance Committee will include a $10,000 cap as an initial “negotiating mark” in its legislative text later Monday, according to a story published by Punchbowl News on Monday.
However, several Republicans in the House don’t like the gamble.
Republican Representative Mike Lawler of New York wrote on X Monday, “Dead on arrival,” in reaction to the Senate Finance Committee’s intention to remove the SALT relief that the House of Representatives had approved in its version of the measure last month.
In a later statement, Lawler stated that he will “not accept a penny less” than the $40,000 maximum that was reached in May for families earning less than $500,000. “If the Senate reduces the SALT number, I will vote No and the bill will fail in the House,” he stated.
“The Senate doesn’t have the votes for a $10k SALT in the House,” Lawler’s fellow New York Republican Representative Nick LaLota said bluntly in an X post, adding that the SALT limitation would become “unlimited” if the Trump tax cuts were permitted to expire at the end of the year.
The three-vote Republican majority in the lower house depends on the votes of members from high-tax jurisdictions, such as California and New York, whose constituents were harmed by the $10,000 cap on SALT deductions imposed by the tax reform package signed into law by President Trump in 2017. This is reflected in the bill that was passed by the House.
However, Senate Republicans, who are mostly from lower-tax areas, see the deduction as a budget buster that they cannot defend and as a gift to wealthy blue-state citizens.
Last month, Wyoming Republican Senate Majority Whip John Barrasso declared, “SALT has no effect on any senator.” “We can relate to their circumstances in that location, but we don’t face the same difficulties or pressures. We need to concentrate on other matters involving other members.
With Republicans like Lawler and LaLota representing suburban swing districts where high property taxes and a slim house majority have made SALT a defining issue, the equation is finally collapsing into a harsh electoral reality.
Senate Republicans risk losing the votes they need to approve the larger tax and spending package, which includes extra border enforcement money, an extension of Trump’s individual tax cuts, and new tax reductions for seniors and tipped workers that were part of the president’s campaign platform, if they reject SALT relief.
However, raising the SALT ceiling is costly; according to Senate Finance Chairman Mike Crapo, a Republican from Idaho, it would cost roughly $350 billion over a ten-year period. Republicans in the Senate would want to use that money to create long-term corporate deductions, such as the full cost of R&D and investments in real estate and large machinery.
The battle for SALT is not new. The SALT cap was one of the reasons why 12 House Republicans voted against the 2017 tax reform when it was first passed. This time, however, the GOP’s majority is far smaller.
The tax plan is currently at risk of being delayed or derailed by the SALT dispute. To date, many MPs are still hopeful that the legislation will pass.
“Everyone knows this 10K number will have to go up,” Republican Representative Elise Stefanik of New York stated on X Monday. “And it will.”
