President-elect Donald Trump told House Republicans Saturday to negotiate a “fair number” on the controversial $10,000 cap on state and local tax deductions, also known as SALT, according to a Politico report.
More than a dozen members from New Jersey, New York, California met with Trump and members of his staff at his Mar-a-Lago resort to discuss the tax, congestion pricing and other issues.
During his presidential campaign, Trump promised to lift the cap.
“I will turn it around, get SALT back, lower your taxes, and so much more,” Trump said in a post on the social media platform Truth Social in September.
“The president certainly wants to increase the deduction for SALT to provide more relief, because he knows that our mayors and governors are crushing taxpayers,” Rep. Nicole Malliotakis (R-N.Y.) told Politico after the meeting Saturday. “He wants us to work on what would be a fair number.”
In his first term as President, Trump signed a tax law in 2017 that set the SALT cap at $10,000. Critics said the cap, which is slated to expire at the end of the year, targeted Democratic-leaning states with high property taxes.
New Jersey’s average property tax bill is nearly $10,000 and is much higher in many municipalities some parts of the state, like Bergen County.
The SALT deduction allows taxpayers to reduce the amount of their annual income that can be taxed by the federal government by taking out how much they pay in state income taxes and local property taxes. The deduction has been in place since 1913, according to the Congressional Research Service.
The $10,000 amounted to a tax increase for many, and some lawmakers have pushed since 2017 for it to be amended. In 2016, before the cap was put in place, New Jersey’s average SALT deduction was just over $18,000, and the largest group filing a claim earned between $100,000 and $200,000 a year, according to a National Association of Realtors report.
Lawmakers’ efforts to lift the SALT cap have fallen short over the years. Some progressive Democrats have criticized the SALT deduction as a tax break for the wealthy. And many Republicans from low-tax red states also oppose an increase to the cap.
An earlier proposal to double the cap from $10,000 to $20,000 would cost the federal government $22 billion over a decade, according to The University of Pennsylvania’s Wharton School.
A recent report by the Committee for a Responsible Federal Government estimated that doubling the SALT cap for married couples would reduce revenue by $170 billion, on top of the $3.9 trillion deficit impact of extending the expiring individual and estate tax provisions in the Tax Cuts and Jobs Act and provide 94% of its benefit to households making over $200,000 per year.
