The fate of essential tax credits for many residents of New York and other high-tax states will be at the top of the agenda when House Republicans meet with President-elect Donald Trump in Florida this weekend.
At Saturday’s rally at Mar-a-Lago, Reps. Mike Lawler, Nick Larota and others spoke about the cap on the federal deduction for state and local taxes, better known as SALT, as part of a sweeping bill. We plan to advocate for an increase. Republicans are aiming to pass a tax reform bill this Congress.
However, in interviews with Spectrum News ahead of that meeting, both Mr. Lawler and Mr. Larota tempered expectations, suggesting that the SALT deduction is unlikely to be fully reinstated.
“Ideally, we would like to go back to unlimited, but I don’t know if that’s realistic because it’s being negotiated through the tax bill,” Lawlor said.
“Unlimited may not be an option,” Larota said.
During last year’s campaign, Trump pledged to “bring back SALT,” vowing to restore the deduction he largely eliminated in 2017 to pay for tax cuts passed by Congress. The 2017 law limited the deduction on local and state tax payments to the first $10,000.
Trump’s campaign advertisement was welcomed by New Yorkers.
The SALT cap disproportionately hits taxpayers in blue states like New York, where property taxes and state income taxes are relatively high. Lifting this restriction is a priority for New York Democrats and Republicans alike.
Because Republicans hold a slim majority in the House, all Republicans effectively have veto power over the contents of the final package.
“I’ve been very clear: I will not support any tax bill that does not eliminate the SALT cap,” Lawler said in an interview.
Ahead of Saturday’s rally, he reintroduced a bill that would raise the cap to $100,000 for single filers and $200,000 for married couples filing jointly.
But Democrats say anything short of complete repeal is not enough. Hudson Valley Rep. Pat Ryan, a Democrat, said it’s time for Republicans to “put up or shut up and use the influence they have over the next president.”
“I hope they step in there and push full force for complete repeal. That’s certainly what my constituents deserve and rightly demand,” he said. .
Ryan called on President Trump to involve Democrats in SALT negotiations.
LaRota and Lawler point out that even a partial cap lift would be beneficial, and warn that derailing the entire tax system would be disastrous. Both men urged their Republican colleagues to work together.
“Even $30,000 to $60,000 is effectively a complete repeal for about 90% of my constituents,” Larota said.
“There’s no way the tax bill won’t pass,” Lawlor said. “That would result in the largest single tax increase in American history, which is also unacceptable.”
In a statement Wednesday, New York Gov. Cathy Hochul, a Democrat, insisted that anything less than a complete lifting of the cap was acceptable. “Republicans have siphoned billions of dollars directly from voters’ pockets, and now is the time to make it happen,” she wrote. “There are no excuses.”
“President Trump has received from the American people a historic mission to make America prosperous again,” Caroline Leavitt, Trump transition spokeswoman, said in a statement ahead of the meeting. We will work to realize our own challenges for the sake of the future.”
