Trump Advocates SALT Deduction Increase as House Republicans Propose Tax Relief Plans

President-elect Donald Trump reaffirmed his commitment to revisiting a key provision of his 2017 tax reform law on Saturday, urging over a dozen House Republicans at his Florida estate to devise a plan for increasing the state and local tax (SALT) deduction, according to four lawmakers who were present.

During his first term, Republicans capped the SALT deduction at $10,000 to offset the costs of the sweeping 2017 tax law, which was passed along party lines. This decision drew bipartisan criticism from representatives of high-tax states like New York and New Jersey, who have since prioritized restoring the deduction for their constituents.

Efforts to increase or remove the SALT cap gained momentum during Trump’s presidential campaign, where he pledged to “get SALT back.” However, House Republicans advocating for changes to the cap have yet to align on specifics.

Proposals under consideration range from raising the deduction limit to $200,000 to more moderate increases, such as tying gradual hikes to inflation. Currently, the $10,000 cap applies to both individuals and married couples, but lawmakers expressed consensus that married couples should receive a higher deduction.

At Saturday’s meeting, House Republicans from states like New York, New Jersey, and California presented various solutions. One suggestion involved negotiating with state and local governments to freeze or lower tax rates in exchange for higher federal deductions for residents.

“Maybe we increase the deduction, but it could go even higher if your state commits to freezing or lowering tax rates,” said Representative Nicole Malliotakis, a New York Republican and member of the Ways and Means Committee. “We’re exploring all options.”

Trump, who hosted the meeting and served attendees coconut shrimp and Trump-branded bottled water, mostly listened as lawmakers shared their ideas.

Trump Advocates SALT Deduction Increase as House Republicans Propose Tax Relief Plans

He encouraged them to reach a consensus, according to participants. Any proposed changes would require near-unanimous support from congressional Republicans, many of whom are wary of providing tax relief to higher-income residents in Democratic-led states.

Increasing the SALT deduction cap would come at a significant financial cost, complicating Republicans’ efforts to fund their planned tax bill this year. Lawmakers are exploring offsets, such as limiting businesses’ ability to deduct state and local taxes, to cover the expense.

“It can’t be unlimited, and we still need a cap,” said Representative Jeff Van Drew, a New Jersey Republican who attended. “We have to find that sweet spot.”

Additionally, lawmakers used the meeting to pitch Trump on federal intervention against New York City’s congestion pricing plan, which they argue could burden residents further.

The meeting underscores the ongoing debate over SALT deductions, with lawmakers balancing regional demands, fiscal responsibility, and broader political implications as they work toward a resolution.