Tax Break for Homeowners: The Battle Over SALT Deduction

NEW YORK — Rep. Mike Lawler is pouring his political capital into the fight over a key tax deduction — staking his future on monthslong tax policy talks that will heat up Saturday when he and other blue-state Republicans meet with President-elect Donald Trump.

The Quest for Tax Relief

The media-savvy moderate, who recently won reelection as a Republican in a heavily Democratic New York suburb, would achieve hero status at home if negotiations result in Trump lifting the state and local tax deduction cap known as SALT.

The bigger the increase, the brighter his prospects — especially as he weighs a bid for New York governor.

And Lawler isn’t alone.

House colleagues in New York, New Jersey and California — where property taxes can easily exceed the current $10,000 cap for middle-class homeowners — will join him this weekend at Trump’s Mar-a-Lago transition headquarters to advocate for tax relief. The battleground members in the closely divided House know SALT could make or break their midterm campaigns, and interviews with six of them across the three states illuminated their strategy.

They plan to remind Trump of his campaign promise to “get SALT back,” argue that the deduction helps middle-class voters in states that help decide House control and even appeal to him as a fellow New York property owner.

“The reality is that we’re going to lift the cap on SALT, period,” Lawler told POLITICO after reintroducing a bill to boost the deduction limit to $100,000 for single filers and $200,000 for married couples filing jointly.

“First of all, if no tax bill passes, SALT comes back unlimited,” he added. “So the incentive is on everybody to negotiate in good faith over the entirety of the tax bill.”

Political Maneuvering

The so-called SALT Republicans believe they have leverage as they go up against GOP colleagues from around the country who see the deduction as a handout to the wealthiest states.

They definitely have the numbers. House Speaker Mike Johnson has a 219-seat majority, just one more than the minimum necessary to pass legislation.

Native New Yorker Trump’s campaign-trail vow on SALT — with the House majority on the line — would undo part of his 2017 Tax Cuts and Jobs Act, but his team hasn’t specified what that would look like.

“President Trump received a historic mandate from the American people to Make America Wealthy Again,” transition spokesperson Karoline Leavitt has said. “He will work across the political spectrum to deliver on his agenda for the American people.”

Looking Ahead

The returning president’s signature tax package is set to expire at the end of the year, and the debate over the renewal of trillions of dollars’ worth of cuts, especially for corporations and the wealthy, will feature the future of SALT as a chief sticking point.

SALT Republicans aren’t publicly naming their floor as they prepare for the Mar-a-Lago meeting.

“We need to move in the direction of higher. Nobody has the best sense of exactly what it will be,” Rep. Chris Smith (R-N.J.) said.

Simply doubling the cap, as some in the Trump admin have suggested, is “1,000 percent” insufficient, Lawler said.

What’s clearer is that a full restoration of the deduction — which Democrats are clamoring for — is likely a nonstarter.

“I think we need to be reasonable and recognize that it’s not going to be unlimited,” Rep. Nicole Malliotakis (R-N.Y.) said. “It needs to be targeted to the middle class.”

Implications and Challenges

House Minority Leader Hakeem Jeffries (D-N.Y.) and the Democrats will have a lot of influence, given that they have 215 seats. But it’s the SALT Republicans who will wield much more power as Johnson (R-La.) seeks to hold his caucus together, since Republican leaders are planning to use a legislative tactic that will require only GOP votes. Lose their votes and the GOP could lose its tax bill.

In 2017, nearly all of the 12 Republicans who voted against Trump’s tax package did so in protest of the SALT deduction limit.

“I didn’t vote for that tax cut. I voted against it on behalf of SALT,” Rep. Darrell Issa (R-Calif.) said of the last go-around, adding of his Mar-a-Lago trip: “I come there with my record of feeling that there was a better way to do it.”

Several SALT Republicans gathered earlier this week on Capitol Hill with Ways and Means Committee members who’ll be writing the tax code. Little appeared to emerge from the closed-door talks beyond the acknowledgement that this debate could get messy, because tax relief for one part of the country can mean more tax burden for another.

Rep. Nick LaLota of New York likened the process to a game of “whack-a-mole.” He’s one of several SALT advocates managing expectations ahead of their Trump meeting.

“As you lower taxes in one area, that potentially has the effect of increasing taxes in another area,” he said in an interview Thursday, adding that there’s “the Rubik’s cube sort of approach to the tax code, and there’s an acknowledgement that SALT Republicans are going to get a win on SALT.”

Conclusion

LaLota of Long Island and Lawler of the Hudson Valley are two of battleground Republicans pushing hard for a cap lift.

On the Democratic side, frontline Rep. Tom Suozzi of Long Island has long made it a key cause, saying he’ll use his reappointment to the powerful Ways and Means Committee to advance the fight. Newly elected Rep. Laura Gillen of Long Island used her first letter to congressional leadership to advocate for a bipartisan solution for SALT. And Rep. Pat Ryan of the Hudson Valley has demanded that Democrats be included in the Mar-a-Lago summit, trumpeting that he’s ready to go there himself.

New York Gov. Kathy Hochul, a Democrat seeking reelection next year, is pinning SALT on the New York House GOP, saying the cap costs New Yorkers up to $12 billion each year.

“Republicans have drained billions directly from the pockets of their own constituents, and now it’s time for them to deliver,” she said. “No excuses. No half measures. It’s all or nothing — New Yorkers deserve a full repeal.”

But the GOP delegation members have eagerly and regularly attacked Hochul on what they perceive as her role in the tax burden.

“We wouldn’t need SALT relief if the mayor and the governor didn’t abuse taxpayers,” Malliotakis told POLITICO.

“Kathy — you are the worst Governor in America,” Lawler, who could challenge Hochul for governor in 2025, posted on X. “New York leads the nation in outmigration because of reckless spending — up $61 billion in just 4 years — and the highest tax burden in the country.”

But the outspoken House member played coy on how the SALT fight could turbocharge his career aspirations.

Lawler walks the line between fealty to the founder of the MAGA movement and answering to the more liberal voters north of New York City as he seriously contemplates a bid for governor. Clawing back SALT is where he is making his next stand.

Mia McCarthy and Ry Rivard contributed to this report.