WASHINGTON — House Republicans on Monday unveiled the legislative text of their sweeping tax proposal for the massive bill for President Donald Trump’s agenda, but a key divide within the conference remains: how much to lift the cap on the deduction for state and local taxes, known as SALT.
Speaker Mike Johnson, R-La., convened a video call Monday morning with members of both the tax-writing Ways and Means Committee and the SALT Caucus, a group of blue-state Republicans who have been fighting to raise the SALT cap much higher than the current level of $10,000. While several proposals were discussed, GOP lawmakers were unable to agree on a number.
During an all-member GOP conference call in the afternoon, Rep. Jason Smith, R-Mo., the chair of the Ways and Means Committee, told colleagues that the final SALT number was still a work in progress, according to two lawmakers on the call.
The legislative text currently calls for the SALT deduction cap to be hiked to $30,000, and includes limits for those who make more than $400,000 a year. But SALT Caucus members — including Reps. Nick LaLota, R-N.Y., Elise Stefanik, R-N.Y., Mike Lawler, R-N.Y., and Young Kim, R-Calif. — have said that number is a nonstarter.
One House Republican close to the process told NBC News there would be enough GOP votes to sink the bill if that SALT figure remains in the final product. Republicans can afford just three defections for the final package once it reaches the House floor.
Lawler said there was “zero chance” he would support the current version of the bill.
“As I have said repeatedly, I will not support any bill that does not adequately lift the cap on SALT. This bill as written fails to deliver and will not have my support,” Lawler said. “I look forward to continuing to negotiate with leadership and the administration to provide real tax relief for my constituents.”
LaLota wrote on X after the text was posted: “Still a hell no.”
“We are not budging and this bill, as written, will not receive any of our votes,” said a pro-SALT Republican lawmaker who is opposed to the current proposal.
But Smith is pressing forward with a markup in his committee beginning Tuesday afternoon, leaving Johnson with the difficult task of striking a deal on SALT before a final floor vote, which he is aiming to hold next week.
The prickly tax issue has created some tension between Johnson and Smith. During the morning video meeting, Smith told his colleagues it wasn’t his job to negotiate with the SALT Caucus Republicans, but the speaker’s job, according to two sources on the call.
Smith explained that his bill reflects the will of his committee, not of the SALT Caucus, the sources said. The speaker, the sources said, didn’t directly commit to arbitrate the issue.
Johnson’s office did not respond to a request for comment.
During the video call with Johnson, pro-SALT Republicans said they supported a figure floated last week by Kim: a $62,000 cap for individual tax filers and a $124,000 cap for joint filers, one source on the call said. But it’s unclear whether all pro-SALT Republicans, who have had mixed ideas on how to solve the issue, are equally committed to that figure. Another GOP source with first-hand knowledge of the situation noted that the pro-SALT group has been non-committal on a number throughout much of this process.
But Rep. Nicole Malliotakis, R-N.Y., the only SALT member who also serves on the Ways and Means Committee, announced her support for the SALT figure and overall tax proposal.
“Tripling the deduction to $30,000 will provide much-needed relief for the middle-class and cover 98% of families in my district,” said Malliotakis, whose district includes Staten Island.
Malliotakis’ signal of support indicates that Smith may have the votes to get the bill out of the Ways and Means Committee and pass the issue onto Johnson, forcing him to amend the legislation to find the votes in the full House.
The broader plan released by the Ways and Means Committee Monday would extend the expiring tax cuts Trump signed into law into 2017 and incorporates some of Trump’s other campaign promises, including eliminating federal taxes on tips and overtime through 2028. It also creates a tax break for auto loan interest payments, which Trump had campaigned on in the swing state of Michigan in 2024.
And the plan establishes so-called “MAGA accounts,” new savings accounts for newborns.
The plan, though, does not include a tax hike on the wealthy, despite Trump personally urging the speaker to add it during a phone call last week. Trump had pushed to raise the tax rate for higher-income earners to 39.6%, up from the current 37% rate. But Trump’s proposal quickly ran into a buzzsaw of opposition from anti-tax Republicans.
Democrats from high-tax states, like New York, slammed the $30,000 SALT cap as paltry.
“This number is nothing short of insulting to hardworking Long Islanders,” said first-term Rep. Laura Gillen, D-N.Y. “For years, Republicans in New York and other high-tax states promised to oppose any bill that failed to restore the full deduction. It’s time for them to honor that promise.”
