In a meeting at his Mar-a-Lago estate, former President Donald Trump directed House Republicans from high-tax states to develop a “fair number” for increasing the state and local tax (SALT) deduction on income taxes, signaling a potential shift in Republican tax strategy as they prepare to extend parts of the Tax Cuts and Jobs Act (TCJA).
Among the attendees from the so-called SALT Caucus, was second-term Congressman Vince Fong (R–Bakersfield).
Driving the news: The SALT deduction has long been a critical issue for many GOP lawmakers, particularly those from high-tax states like New York and California, who have been pushing for changes to the $10,000 cap imposed by the Trump tax law.
- This cap, set to expire at the end of 2025, has been a point of contention, especially among Republicans representing districts where constituents are disproportionately affected by high state and local taxes.
- The meeting, which included discussions on various tax policies, highlighted the political tightrope Republicans must navigate.
- The SALT deduction affects a significant portion of middle and upper-middle-class voters in high-tax states, areas where Republican support can be crucial.
- However, any increase in the deduction cap could lead to substantial revenue losses unless offset by other fiscal measures, presenting a challenge in balancing the budget.
Inside the beltway: Trump’s directive comes at a time when the GOP is looking to unify its approach on tax policy ahead of the 2025 legislative session, where many provisions of the TCJA are set to expire.
- Despite the enthusiasm from some GOP lawmakers in high-tax states, not all Republicans are on board with increasing the SALT cap. Critics within the party argue that such a move would disproportionately benefit the wealthy, undermining the principle of tax neutrality.
- Moreover, there’s a concern that increasing the SALT deduction could complicate efforts to pass a comprehensive tax package, given the need to find fiscal offsets.
What they’re saying: Fong, via social media, shared a view of the meeting at Mar-a-Lago.
