New York Republicans were split Friday over their demand for a much higher cap on deducting state and local taxes, or SALT, amid a feud with GOP congressional leaders that threatens to derail President Trump’s sprawling budget bill.
Staten Island Rep. Nicole Malliotakis suggested she backs the GOP leadership proposal to increase the SALT cap to $30,000 from the current $10,000, even as suburban Republican lawmakers trashed it as a non-starter.
“Tripling the deduction to $30,000 will provide much-needed relief for the middle class and cover 98% of the families in my district,” Malliotakis said in a statement Friday.
The stand by Malliotakis, the only New York Republican on the tax-writing Ways and Means Committee, puts her directly at odds with fellow GOP lawmakers from the New York suburbs, who bitterly oppose the proposed $30,000 cap.
The other Republicans, including Westchester County Rep. Mike Lawler and Long Island’s Rep. Andrew Garbarino and Nick LaLota, are demanding a much higher cap or scrapping the cap altogether.
“It’s not just insulting, it risks derailing President Trump’s One Big Beautiful Bill,” the trio wrote in a statement joined by upstate GOP Rep. Elise Stefanik. “A higher SALT cap isn’t a luxury. It’s a matter of fairness.”
Rep. Young Kim (R-California), who represents an affluent Orange County district also rejected the $30,000 cap.
“If there is not a fix for SALT, there is no bill,” Lawler told reporters on Capitol Hill. “It is a hill I am willing to stake my entire congressional career on,” LaLota added.
The cap on SALT is a huge issue for Republicans representing wealthy suburban districts in blue states like New York, New Jersey and California with high state and local taxes.
The current $10,000 cap on SALT deductions was introduced in the original 2017 Trump tax cut and an increase is being negotiated as part of the tricky talks for a sprawling budget bill that will need the votes of nearly every single Republican House lawmaker to pass.
If the 2017 tax measure is not renewed, the cap on SALT would also be eliminated, a fact that the rebel GOP lawmakers believe gives them leverage to push for a much bigger cap in exchange for their votes.
Republican congressional leaders don’t want to raise the cap any higher than they have to because fiscal conservatives see the SALT deduction as a sweetheart deal for wealthy residents of high-tax blue states.
House Speaker Mike Johnson believes he can eventually bulldoze the small group of self-described SALT Caucus Republicans into line by giving them unrelated concessions or threatening to blame them for torpedoing one of Trump’s top priorities.
Democrats are already laying the groundwork to criticize Republicans who vote for any extension of the SALT cap, which they say should be allowed to lapse.
“Anything that Republicans are doing that relates to a cap actually will increase taxes on the American people, not lower taxes,” House Minority Leader Hakeem Jeffries said.
