SALT talks remain unresolved on Capitol Hill. 

“It was a lively discussion,” Long Island Congressman Nick LaLota said coming out of a meeting with House leaders this week. “But we’re still far away” from a deal, he added.

As the GOP looks to move ahead with President Donald Trump’s sweeping legislative agenda, Republicans in Congress from high tax states, including New York, are demanding the package include an increase to the current $10,000 cap on the federal deduction for state and local taxes, or SALT.

What You Need To Know

  • Republicans in Congress from high tax states, including New York, are demanding the bill encompassing President Trump's agenda include an increase to the current $10,000 cap on the federal deduction for state and local taxes, or SALT
  • So far, Republicans have not reached a deal on how far to increase the SALT cap

Those SALT advocates huddled behind closed doors Wednesday with House Speaker Mike Johnson and other leaders. But so far, there is no consensus on how high to go.

“I think every member has a little bit of a different situation in their districts,” Rep. Nicole Malliotakis of Staten Island said Thursday. 

“The fact is that they need to address the cap on SALT as part of this bill, or there won't be a bill,” Rep. Mike Lawler said.

The $10,000 cap was put in place during Trump’s first term to help pay for his package of tax cuts that Republicans enacted in 2017. Analysts say the top 10 to 20 percent of income earners felt the brunt of that change. 

Lawmakers have floated various ideas for how to modify the cap, from upping it to $25,000 — a proposal that has been largely rejected as insufficient by New York Republicans — to boosting it ten-fold. 

Some, like Malliotakis, have argued their primary focus should be making changes that benefit the middle class. 

Andrew Lautz, the associate director of economic policy at the Bipartisan Policy Center, said that as a general rule, “the higher your SALT cap goes, the wealthier your beneficiaries are.”

“Even if we're talking about going from the current $10,000 cap to $20,000 or $25,000, we're primarily talking about benefiting six-figure households and seven-figure households — households making in the $200,000, $300,000 range,” Lautz added. 

Ultimately, this is all a balancing act.

Raising of the SALT cap also reduces the federal government’s tax revenue, potentially by hundreds of billions of dollars over a decade. That creates a challenge for the president and other Republicans who want to push through other tax cuts. 

“What that means of course is you have to find — if you want to go that way — other tax offsets,” said Garrett Watson, director of policy analysis at the Tax Foundation. “Maybe you're not as aggressive on making certain things permanent or extending them out, or you got to find cuts elsewhere on the spending side to make up for it.”

The legislation Republicans are trying to put together is in some ways a house of cards. One small policy disagreement — be it the SALT cap or, for instance, potential cuts to Medicaid spending — and the whole thing can collapse. 

Earlier this week, Speaker Johnson said his chamber should be able to pass the agenda by Memorial Day.