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GOP divided over lifting SALT cap
Rep. Mike Lawler, R-NY, joins ‘Sunday Morning Futures’ to discuss Trump’s meeting with blue state Republicans on lifting the SALT cap and New York City congestion pricing.
President-elect Donald Trump is giving Republicans his blessing to negotiate a key tax that could prove critical to GOP negotiations for a massive overhaul of conservative politics next year.
Trump met with several different groups of House Republicans at Mar-a-Lago over the weekend, including blue state GOP lawmakers who make up the House SALT Caucus, a group that opposes the current $10,000 limit on deductions of state and local taxes (SALT) that primarily affect urban and suburban residents. in areas with high income and property taxes, such as New York, New Jersey, and California.
“I think it was productive and successful,” Rep. Nicole Malliotakis, R.N.Y., said of the meeting. “The president supports our efforts to increase the SALT deduction. He understands that blue state mayors and governors are crushing taxpayers and wants to provide relief from the federal level.”
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President-elect Donald Trump told New York Republicans that he would work with them on a number of priorities. (Chip Somodevilla/Getty Images)
But Trump also noted that he was aware of opposition from others in the House Republican conference, particularly Republicans in rural districts, who have seen SALT deductions as tax breaks for the wealthy. Before the cap was imposed in 2017, there was no limit on the amount of state income taxes and local property taxes people could deduct from their income when filing their federal returns.
“It gave us a small task to work on, a number that could give our middle-class constituents relief from the high taxes imposed by our governor and mayor and, at the same time, something that could build consensus and reach (a majority of 218 votes),” Malliotakis said.
“I think we pretty much know that there will not be a complete lifting of the SALT cap. There is no desire within Congress, or even among American taxpayers, to reduce taxes for the ultra-wealthy.
“Our efforts are really geared toward middle-class families, and that’s what we focus on to try to strike the right balance.”
The current SALT deduction limit has been opposed by New York and California lawmakers for much of its existence, since it was imposed in Trump’s Tax Cuts and Jobs Act (TCJA).
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Rep. Nicole Malliotakis told Fox News Digital that Trump would work with New York Republicans on congestion pricing. (Drew Angerer/Getty Images)
Trump suggested he would change course during his second administration in September last year, when he posted on Truth Social that he would “bring back SALT, cut your taxes, and much more.”
The discussions are part of broader Republican conversations about passing a massive overhaul of fiscal and conservative policy through a process known as “reconciliation.”
By lowering the Senate threshold for passage to a simple majority instead of two-thirds, the process allows the party that controls both chambers of Congress and the White House to pass certain legislation as long as it addresses budgetary and other fiscal issues.
Some Republican supporters of the SALT deduction, such as Rep. Mike Lawler, R.N.Y., had signaled they could withdraw support for the final bill if the limit was not raised.
“The only red line I have is that if there’s a tax bill that doesn’t lift the SALT cap, I wouldn’t support it,” Lawler told Fox News’ Sunday Morning Futures.
Lawler also said Trump agreed that SALT deduction limits needed to be increased.
House Republicans have virtually no margin for error with a razor-thin majority from Trump’s inauguration until probably sometime in April.
Rep. Mike Lawler said the limits on SALT deductions were a “red line” for his support for a budget reconciliation bill. (Tierney L. Cruz)
Meanwhile, Trump also told New York Republicans that he would help them fight their state’s crisis. Controversial congestion pricing rule that imposes an additional cost for driving in parts of Manhattan.
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“He understands how unfair this is and how it would affect the city’s economy and the people we represent, which is why we are currently working with him on legal options to reverse the Biden administration’s rubber stamp,” Malliotakis said. “If there’s a legal option, if there’s a legal option for him to stop congestion pricing, he will do it.”
“There are, you know, police officers, firefighters, nurses, restaurant workers who have to come in at odd hours and drive because they don’t feel like the transit system is clean or safe.”
Congestion pricing went into effect in New York City earlier this month.
Fox News Digital reached out to Trump’s transition team for comment on this weekend’s meeting.
