(Bloomberg) — Key House Republicans on Thursday discussed ways to direct an expanded state and local tax deduction to those making less than $400,000 as they seek to balance the cost of the tax break with the political needs of several lawmakers from New York and other high-tax states.
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The $10,000 cap on SALT, one of the most contentious issues in the GOP debate on its giant tax bill, remained unresolved as lawmakers left Washington Thursday.
Republicans on the House tax panel discussed a series of options to direct the deduction to middle class households, New York Representative Nicole Malliotakis told reporters. Committee members delved into options, including the overall cap level, how many years to extend it and if there should be income limits for who can claim the write-off, she said.
“It needs to be adjusted in a reasonable manner where it is targeted to the middle class,” she said, adding that the Ways and Means Committee would reconvene on the issue next week. Malliotakis represents Staten Island.
Targeting middle-class tax payers could be accomplished through an income limit or though the size of the cap itself, which would limit the benefits going toward those with the highest property and income tax bills.
Such a SALT change could cost about $25 billion per year, Malliotakis said, but that depends on the size and duration of the cap adjustment. She said she opposes any changes to the alternative minimum tax, which could hit middle-class taxpayers.
Thursday’s discussion followed a Wednesday meeting between pro-SALT members and House Speaker Mike Johnson and Ways and Means Committee Chairman Jason Smith. Members left the meeting saying the two factions didn’t reach a deal.
Earlier: Pro-SALT Republicans, House Leaders Divided Over Tax Break
An income limit would curb benefits for residents in some of the most expensive areas of the country — near New York City and Southern California — that are most concerned about the SALT deduction.
“I have made clear in no uncertain terms that I won’t support an income limit,” Representative Mike Lawler, who represents a suburban district just north of New York City, said in an interview Thursday, adding that he’s waiting to see a concrete SALT proposal from the Ways and Means Committee.
