Speaker Mike Johnson says he’s closer to ending a politically charged standoff over a key tax provision that is one of the major hang-ups standing in the way of the GOP’s “big, beautiful bill.”
House GOP leaders and the so-called SALT Republicans from high-tax blue states are discussing ways to further boost the limitation on the state and local tax deduction. They’re discussing using the additional fiscal space from the GOP’s tax bill coming in underneath a $4 trillion cost target, according to two Republicans with direct knowledge of the matter.
“That’s part of the discussion,” Johnson confirmed in a brief interview Tuesday as he dashed out of an evening meeting with the SALT Republicans. A Ways and Means Committee draft released Monday pegged the deduction at $30,000 — up from the existing $10,000 cap — but subject to a phaseout for those earning more than $400,000. Some of the Republicans want the break set north of $60,000 for an individual filer.
Johnson said he thought the SALT issue was close to being resolved but probably would not be closed out Tuesday night. He added that the “marriage penalty is part of the discussion” — referring to the fact that the current deduction does not double for joint filers, as many other income tax breaks do.
The issue is one of the thorniest of the remaining issues for Johnson to resolve in the megabill. Ways and Means Republicans have also been weighing in on the SALT issue, with many in the GOP conference wary of handing a large cap increase that would mainly benefit residents of Democratic states.
