Attention FAE Customers:
Please be aware that NASBA credits are awarded based on whether the events are webcast or in-person, as well as on the number of CPE credits.
Please check the event registration page to see if NASBA credits are being awarded for the programs you select.

SALT Cap Fight Stalls GOP Tax Plan

By:
Karen Sibayan
Published Date:
May 13, 2025

A couple of New York Republican lawmakers vowed to stop the GOP's signature tax legislation if the party's leaders do not raise a proposed $30,000 limit on the federal income tax deduction for state and local taxes (SALT), Bloomberg reported.

On May 12, both lawmakers' declarations right after House Republicans released a draft version of their tax bill highlights how hard it would be for party leaders to secure the passage as lawmakers from high-tax states demand greater SALT cap increases. There are more hiccups on the horizon with politically vulnerable Republicans worried about Medicaid cuts and as fiscal conservatives press for more spending reductions, Bloomberg stated.

Representative Mike Lawler, a New York Republican, said that the proposed SALT limit is “woefully inadequate” and stated during a Bloomberg Television interview that he will remain a “hard no” on the legislation unless there is a cap increase.

Meanwhile, Nick LaLota, who is another New York Republican, stated that he was “insulted” by the cap and will be a “hell no” vote against it.

Three more Republicans—New York’s Andrew Garbarino and Elise Stefanik as well as Young Kim of California—have previously said no to a $30,000 SALT cap, characterizing it as insufficient and stating they would vote against a bill including such a limit, Bloomberg noted.

Additionally, the House tax committee’s draft bill to renew President Donald Trump’s 2017 tax cuts would impose a new income limit on the deduction. This would phase out for those earning over $200,000, or married couples earning over $400,000.

According to Bloomberg, LaLota stated that’s just a small part of what SALT proponents in the House want. A group of lawmakers—mostly from New York, New Jersey and California—who are most committed to broadening the tax break want a $62,000 deduction cap for individuals. It would be twice that for couples, the person stated. They also asked that those amounts be indexed for inflation for future years. Additionally, they demanded  that the higher limits are available for taxpayers starting in 2025, Bloomberg said.

House Speaker Mike Johnson said to reporters on May 12 shortly prior to the draft legislation was released that no final SALT limit had been set yet. The House Ways and Means Committee is set to debate the legislation on May 13 and party leaders can change it at any time prior to a House vote.

“There were lots of numbers discussed,” Johnson stated after a meeting with lawmakers worried about the tax break.

The draft legislation caps the SALT limit at $30,000 for both individuals and married couples, up from the current $10,000 limit imposed in the 2017 law. Before that law, there was no limit on the deduction and without new legislation, the cap would automatically be taken out when the 2017 law expires at the end of 2025.

According to Bloomberg, the SALT issue has been one of the most controversial for the House GOP to resolve as party leaders attempt to pass the tax cut package through the House in May. The bigger the cap adjustment is, the less money there will be for other tax cuts on the GOP agenda, according to Bloomberg.

House Republicans are attempting to restrict losses in revenue coming from their tax cut package to a self-imposed limit of $4.5 trillion. Their goal is for $2 trillion in spending cuts.

The ceiling must accommodate an approximately $4 trillion extension of the expiring 2017 Trump tax cuts as well as new cuts to taxes on tips and overtime. Republicans are also aiming for new tax breaks for seniors, car buyers and businesses building U.S. factories, Bloomberg reported. 

 

 

Click here to see more of the latest news from the NYSSCPA.