Staff Reports
Senate Republicans appear less than eager to fulfill former President Donald Trump’s campaign promise to repeal his own cap on state and local tax (SALT) deductions. What was once a centerpiece of Trump’s 2017 tax overhaul is facing significant pushback from the GOP side of the aisle. While Trump might be advocating for the wealthy residents of blue states to get a little TLC from the taxman, many Republicans see this as a potential boondoggle for high-income elites residing on the coasts.
The SALT deductions are typically lauded by blue-state lawmakers whose constituents bear the brunt of hefty tax bills. However, to Republicans, lifting this limit feels like handing a bag of gold right to the coastal elite to pat their backs even more. Senate Minority Whip John Thune of South Dakota, looking to earn his stripes as the next GOP leader, recently indicated that while Trump’s ideas might be reviewed, resistance from party members who believe subsidizing high-tax states is misguided is expected.
FACT — Trump & MAGA took away our SALT deductions.
FACT — The SALT law sunsets next year anyway.
This is all performative flip-flopping, from a desperate & weak old man.
This @Newsday headline sucks. It should read — After Screwing LI taxpayers (for 9 years) Trump Backtracks. pic.twitter.com/tbDkKnSWCB
— Brock “I dissent” Wolf (@BrockWolf6) September 18, 2024
Trump’s tax policy, which capped SALT deductions at a mere $10,000 per filer, was a stark change from a previously unlimited system. Just when voters thought they were out of the woods, Trump’s vague proclamations on Truth Social trying to regain the high-tax voter favor in New York state raised eyebrows. It seems he is trying to woo constituents while the party navigates its own conflicting interests, especially in battleground areas where Republicans desperately seek an edge against Democrats.
Senator Mitt Romney, who is set to exit Congress soon, pointed out the obvious absurdity in the GOP’s tug-of-war over SALT deductions. He likened the idea of lifting the cap to a get-rich-quick scheme targeted at the rich in blue states – a thought likely to raise more than a few conservative eyebrows. As the election looms closer, each party appears to be trying to grasp for straws that can help them secure additional votes, with Trump playing a particularly intriguing game of politics.
Interestingly, the SALT cap’s fate could be entwined with larger tax cut proposals from Trump that have conservative fiscal hawks in a frenzy. The former president’s plans to scrap taxes on tips and eradicate taxes on Social Security benefits are argued by him as vehicles for economic growth, though Congress is becoming increasingly cautious about their implications on mounting national debt. As different factions within the GOP hold varying opinions on these matters, the lines are drawn tighter regarding what it means to be the party of fiscal responsibility.
The SALT contention has also created an unexpected alliance between some members of both parties in high-tax states. Even as House and Senate Republicans grapple with how to address Trump’s latest tax musing, they are often finding themselves in the unusual position of agreeing with Democrats on the need to address the ongoing tax issues. As the clock ticks down to the expiration of SALT limits by 2026, Republicans and Democrats alike will need to decide if the tax code should continue to benefit the coastal elites or remain as is, with the GOP standing firm to prevent further financial gifts to those who need them least.
