President-elect Donald J. Trump told more than a dozen House Republicans at his Florida mansion Saturday that they plan to increase state and local tax deductions and repeal key provisions of the 2017 tax law. He reiterated his support for the According to four members of Congress who attended.
Republicans imposed a $10,000 cap on deductions, often referred to as SALT, during Trump's first term to help pay for the sweeping 2017 tax law they passed along party lines. The change upset lawmakers of both parties in high-tax states like New York and New Jersey, who have since made restoring the valuable deduction for state residents a key political promise.
Years of efforts to reinstate the deduction, or at least raise its limits, received a boost during the presidential campaign when Mr. Trump said he would “bring back SALT.” But House Republicans, who want to raise the cap, have yet to reach agreement on the details.
Some are calling for the deduction limit to be raised to $200,000. Some companies have more modest ambitions, including modest increases in deduction limits combined with gradual increases over time to match the pace of inflation. Currently, the $10,000 cap applies to both individuals and couples, and organizations appear to agree that couples have a larger deduction than individuals.
At Saturday's meeting, House Republicans from New York, New Jersey and California pitched Trump various ideas on how to address the issue, according to attendees. Among the ideas discussed was the possibility of persuading local leaders to postpone tax increases in exchange for higher tax credits.
“We may increase the deduction, but if the state freezes or lowers tax rates, the deduction will be even higher,” said Rep. Nicole Malliotakis, a New York Republican and member of the Ways and Means Committee, who attended the meeting. It might happen,” he said. “These are all ideas we're thinking about.”
Trump mostly listened to House Republicans, who were served coconut shrimp and Trump-branded bottled water during the hour-long meeting, and called for unanimity, attendees said. Any reform proposal would require near-unanimous support from other Republicans, many of whom are skeptical about giving tax breaks to primarily high-income residents of Democratic-run states.
Eliminating caps on deductions would be costly, and Republicans are already grappling with the huge cost of the tax bill they plan to pass this year. Lawmakers have been considering the possibility of limiting companies' ability to withhold state and local taxes from federal bills to cover the costs of the changes.
“We can't do it unlimitedly, we still need a cap,” said New Jersey Republican Rep. Jeff Van Drew, who attended the meeting. “You have to find that sweet spot.”
