NY, NJ Republicans pushing for SALT deduction cap as high as $100K

Republican lawmakers from high-tax New York and New Jersey are pushing to hike the state and local tax (SALT) deduction cap for their residents to as much as $100,000 as part of President-elect Donald Trump’s highly anticipated tax package later this year.

The GOP lawmakers, who flew down to Palm Beach, Fla, last weekend for some face time with the incoming president, are now working furiously on Capitol Hill to craft portions of the tax bill that would deliver relief to working- and middle-class families in their states.

“What we’ve been doing as members of [the House] Ways and Means [Committee] is going through the different scenarios, crunching the numbers to get an idea of where SALT — not just SALT — but all the other tax proposals fit together,” Staten Island Rep. Nicole Malliotakis told The Post.

7

“We’re looking at all these things,” Malliotakis said. “Could we offer an increased deduction, let’s say double it, and then it goes up even further if your state and and municipality do the right thing?”

“Why doesn’t Mayor [Eric] Adams cap New York City property taxes at 2% like every other municipality in the state?” she asked. “Why doesn’t Governor [Kathy] Hochul lower personal income tax like President Trump did on the federal level? Is there a way we can hold these individuals who tax New Yorkers to death accountable?”

The maximum SALT deduction currently available for those filing federal returns is $10,000 for individuals and married couples, a limit imposed by Trump’s 2017 Tax Cuts and Jobs Act.

Rep. Jeff Van Drew (R-NJ) said “inflation” has so “ravaged” taxpayers since then that the cap would have to “at least double,” though lawmakers are pressing for more of a deduction.

“When you go and get a hamburger or go to the store — God help you if you gotta buy construction materials — everything,” Van Drew said. “The point is $10,000 then, when those cuts were done, is honestly in my mind at least double that right now, just to stay still, much less help a little bit more.”

Last week, Rockland County Rep. Mike Lawler introduced legislation to lift the cap to $100,000 for individuals and to $200,000 for married couples, eliminating the so-called “marriage penalty” previously in place.

“As I have said from the very start, we are going to lift or repeal the cap on SALT,” Lawler told The Post. “After meeting with President Trump this past weekend, I’m even more confident we will get this done in the 119th Congress. My constituents deserve tax relief, and we’re going to deliver it.”

7

Others like Long Island Rep. Andrew Garbarino, who co-chairs the bipartisan SALT caucus in the House, has floated eliminating the cap entirely.

“The ideal SALT cap is zero,” said Adam Michel, director of tax policy studies at the libertarian Cato Institute. “The SALT deduction is an inefficient subsidy for high-tax state and local governments. If Republicans want to cut taxes for middle-class and high-income earners — which is a good goal — they should cut the top marginal tax rate, not expand special interest deductions.”

Finger Lakes Rep. Claudia Tenney told The Post that the magic cap number, which some participants suggested should be as high as $100,000 or $200,000 for individuals, likely rested on an analysis by either the Joint Committee on Taxation or the Congressional Budget Office (CBO).

7

“I personally don’t want to be constrained by CBO,” Tenney said, “but the Senate parliamentarian uses CBO, which is why I suggested to Trump later on during the meeting” — while the president-elect was busy deejaying for the delegation at Mar-a-Lago — “hire an independent contractor like an Ernst and Young, or a Deloitte … that would be a [Department of Government Efficiency] issue.”

“He just kept saying, ‘Where’s your sweet spot?'” she recalled, describing pushback from GOP fiscal hawks representing deep-red states that is moving the negotiations toward a single bill encompassing border security, energy and tax reforms.

“If you don’t do [a single-bill package with] tax [included], you won’t get a lot of red-state people to vote for the SALT,” Tenney noted.

7

“Folks that are completely opposed, you know, don’t want to do anything with it, believe that these are states that are mismanaged and aren’t run properly and to be honest with you, they have a point,” acknowledged Van Drew.

“I would say to them, ‘We subsidize farming,’ which I’m supportive of, that we subsidize corn, we help in other areas. So there’s got to be some give and take.”

“I think we’re spending billions of dollars on subsidizing wind turbines, money on changing curriculum in school,” Van Drew added of bloated spending initiatives in the Garden State. “It just goes on and on.”

7

“[The cap] can’t be $200,000, and that’s a number that was thrown around,” he added. “It can’t be $100,000.”

“What I would like to see with SALT is a number that would benefit middle-class families and individuals earning less than $500,000 — and index it so it goes up every year to keep pace with inflation,” Malliotakis said. “A flat cap for everybody — it could maybe phase out based on income.”

It’s unclear whether congressional Democrats will play ball on the tax proposals, but the measure could pass with 218 votes in the GOP-controlled House and potentially by a simple majority in the 53-47 Republican Senate if it’s put forward under a process known as budget reconciliation, which lets bills pass without clearing the 60-vote filibuster so long as they’re determined to only affect spending by the Senate parliamentarian

7

“The SALT piece won’t be a tax cut for the rich,” Malliotakis reassured. “They’ll argue about the corporate rate or whatever, you know, because this will ultimately be folded into the one big tax bill, you assume. That’s the goal.”

The Staten Island and South Brooklyn rep also floated other popular line items in the legislation — including eliminating the alternative minimum tax, doubling the standard deduction, doubling the child tax credit and lowering personal income tax rates — that should be included in the updated law at the end of 2025.

“That cannot come back,” Malliotakis said of the alternative minimum tax, which sets a payment threshold based on income for Americans filing their returns with the IRS, arguing it “prohibited” many taxpayers “from benefiting from SALT.”

“I’ve made that very clear to everybody — my chairman, my committee members, the president — that cannot come back because that will hurt middle-class families and have an adverse effect of what we’re trying to accomplish here,” she added.

House Speaker Mike Johnson (R-La.) has favored one bill to be passed by April, glomming the tax line items onto broader changes to immigration and energy policy, whereas Senate Majority Leader John Thune (R-SD) has backed a two-bill method.

7

When on Capitol Hill last week, Trump, 78, said he had a “very strong” meeting with Senate Republicans and vowed to “get something done” on all three priorities — though not all GOP senators have indicated a single bill before the June recess is a possibility.

“Have we come together on tax?” Sen. John Hoeven (R-ND) told Semafor last week. “No, there’s a lot of work to do.”

Malliotakis, for her part, said her money is on the NY GOP members getting their language out first, calling the delegation a “driving force” behind the drafting of tax language.