Growing GOP fight over 'SALT' tax deduction complicates Trump agenda bill

Source: NBC News

May 1, 2025, 4:05 PM EDT


WASHINGTON — Republicans are at loggerheads over the fate of a controversial tax deduction that is critical to winning enough votes in the House to pass President Donald Trump’s legislative agenda. After a week of meetings and discussions, Republicans still haven’t settled on how to handle the state and local tax deduction, also known as “SALT,” which allows filers to deduct up to $10,000 in taxes paid to state and local governments.

Before the House adjourned for the week on Thursday, GOP lawmakers on opposite ends of the spectrum continued to snipe over whether to raise that $10,000 maximum imposed by the 2017 Trump tax cuts. Pro-SALT Republicans insist it’s not enough to lift the cap to $15,000 for individuals and $30,000 for married couples. Party leaders are looking at a higher cap, nixing the “marriage penalty” and potentially an income threshold to limit the deduction to the middle class, according to lawmakers and sources with knowledge of the talks.

There is no consensus in the GOP’s narrow House majority. It is a sensitive topic after several Republicans in high-tax areas lost their re-election races in 2018 after backing the 2017 tax law that imposed the $10,000 cap. A new crop of GOP lawmakers has since won re-election by promising to raise that cap, but doing so would be expensive and complicate the rest of the bill, which also seeks to boost funding for immigration enforcement and the military, as well as raise the debt limit.

SALT is one of many contentious issues in the package, but it is the most unique. Many Republicans — across ideological lines — care little about the deduction and would be content to avoid expanding it. But there is no path to passing a bill without catering to the roughly dozen Republicans in New York, New Jersey and California who have made it a red line.

Read more: https://www.nbcnews.com/politics/congress/growing-gop-fight-salt-tax-deduction-complicates-trump-agenda-bill-rcna204193