Tax cut plan gives bigger SALT deduction but not big enough for some blue-state Republicans

House GOP tax writers are proposing to triple the $10,000 cap on state and local tax deductions from federal income taxes in a bid to win blue state Republicans’ votes for a sweeping tax and spending cuts bill.

Expanding the deduction for state and local taxes, or SALT, is a top priority for Republicans from high-tax blue states like New York, New Jersey and California. But the latest proposal to lift the cap to $30,000 for most taxpayers has not won enough of them over.

The House Ways and Means Committee released bill text containing the SALT cap proposal and other sweeping tax cuts under its jurisdiction on Monday.

Lawmakers are continuing negotiations in hopes of reaching a compromise that will earn enough votes from the holdouts without turning off conservatives who are worried about subsidizing high-tax states and the overall cost of the bill.

House Republicans cannot afford more than three defections as they prepare to extend and expand President Trump’s first-term tax cuts alongside spending cuts and other policy priorities in “one big, beautiful bill.”

A handful of SALT Caucus members, as the supporters of lifting the cap dubbed themselves, have threatened to vote against the package if they don’t feel it provides enough SALT relief for their constituents.

Several rejected the idea of a $30,000 cap when it was first floated last week.

Reps. Young Kim of California and Andrew Garbarino of New York, the Republican co-chairs of the SALT Caucus, called it “a slap in the face to the hardworking taxpayers we represent.”

“It’s not just insulting — it risks derailing President Trump’s One Big Beautiful Bill,” New York Reps. Elise Stefanik, Nick LaLota, Mike Lawler and Mr. Garbarino said in a separate statement.

The 2017 Tax Cuts and Jobs Act set a $10,000 cap on the SALT deduction to help pay for lower tax rates and other breaks. Many of those tax cuts are set to expire at the end of the year, along with the SALT cap. The proposed legislation would permanently renew most provisions, avoiding tax hikes on millions of Americans.

The committee’s draft bill would lift the SALT cap from $10,000 for individuals and joint filers to $30,000 for most taxpayers. Individuals who are married but file a separate return would be subject to a $15,000 cap.

The proposal also adds income restrictions that did not previously exist. The $30,000 SALT deduction would be reduced by 20% for any taxpayers earning over $400,000 a year, but it could not fall below $10,000.

Likewise, the $15,000 deduction for married taxpayers filing separate returns would be reduced by 20% of any income taxpayers earn over $200,000 a year, but it could not fall below $5,000.

Republicans may still change the SALT proposal before or during Tuesday’s committee markup of the legislation. But if they don’t, they should not have a problem getting it through the Ways and Means panel, where Republicans have a seven-seat advantage over Democrats.

Only two Republicans from high-tax states serve on Ways and Means: New York Reps. Claudia Tenney and Nicole Malliotakis.

Ms. Malliotakis appears willing to accept the panel’s proposed SALT cap. Although welcoming a higher number, she said a $30,000 deduction would provide “very significant” savings for firefighters, police officers, nurses and others in her district.

“Tripling it would actually deliver significant relief for people who are in our middle class, which has always been who we’re focused on,” Ms. Malliotakis said on New York’s Fox 5. “We’re not looking to give tax breaks to the billionaires.”

Still, there are enough Republicans opposed to the $30,000 cap to prevent the bill from passing the House unless they change their position.

Mr. Trump said on social media Monday that he would help Republicans resolve any outstanding issues on the bill when he returns from his swing through the Middle East.

“But there shouldn’t be many — The Bill is GREAT. We have no alternative, WE MUST WIN!” he said.