By Newspot Nigeria Business Desk
WASHINGTON D.C. – In a move that signals momentum for President Donald Trump’s sweeping tax cut legislation, House Republicans, led by Speaker Mike Johnson, have agreed to significantly raise the cap on the State and Local Tax (SALT) deduction to $40,000. This marks a notable increase from the previously proposed $30,000 cap and is four times higher than the current $10,000 limit set under the 2017 tax law.
The bipartisan agreement appears to have cleared one of the final roadblocks to passage of the GOP-led tax package, with the House expected to vote on the bill later today. Speaker Johnson told CNN, “It’s not everything the SALT caucus wanted, but they know what a huge improvement this is for their constituents.”
The revised deduction cap will phase out for individuals and couples earning more than $500,000 annually, according to Bloomberg sources. The change affects both individual filers and those filing jointly — a key compromise aimed at appeasing moderate Republicans in high-tax states like New York, New Jersey, and California.
Representatives Nick LaLota, Andrew Garbarino, Elise Stefanik, Mike Lawler (NY), Tom Kean (NJ), and Young Kim (CA) were among those who had warned they would vote against the bill if the SALT cap was not significantly raised.
Before Trump’s 2017 tax overhaul, there was no limit on SALT deductions, allowing residents in high-tax states to deduct most or all of their state and local taxes from their federal tax bill. The reinstatement of a higher cap is seen as a strategic move ahead of the 2026 elections, potentially wooing suburban voters who were previously burdened by the $10,000 limit.
However, the increase is drawing sharp criticism from fiscal conservatives. Many argue that raising the SALT cap undermines efforts to rein in government spending. Their concern is backed by a fresh Congressional Budget Office (CBO) analysis that estimates the tax package would add $3.8 trillion to the federal deficit over the next decade.
Meanwhile, in Texas, lawmakers are advancing separate property tax relief measures, a signal that state-level tax reform remains a hot issue across the country.
As President Trump continues his push on Capitol Hill to secure full support for the bill, the updated SALT provision could prove to be a pivotal bargaining chip — though the broader tax plan still faces resistance from both ends of the political spectrum.
Stay tuned as the House prepares to vote later today.
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