Blue State Republicans Lobby Trump To Massively Expand Tax Breaks For Their Wealthy Residents

Blue state Republican lawmakers are proposing a massive expansion on the cap on federal deductions for state and local taxes that would disproportionately benefit wealthy residents of Democratic-run states with high tax burdens.

New York Republican Rep. Mike Lawler reintroduced the SALT Fairness and Marriage Penalty Elimination Act Wednesday, which would allow federal taxpayers to increase the write-off on state and local taxes for up to $100,000 for single filers and up to $200,000 for married couples filing jointly. The bill’s reintroduction comes in advance of House Republicans who represent blue states who are scheduled to meet with President-elect Donald Trump this weekend to discuss tax policy.

 Republican lawmakers from high-tax blue states will meet with Trump to discuss incorporating an expansion of the SALT deduction into the sprawling tax bill GOP lawmakers are trying to pass this year. Trump floated making changes to the SALT deduction in a Truth Social post prior to a campaign rally on Long Island in September. Other Republican lawmakers reportedly attending the meeting at Mar-a-Lago, in addition to Lawler, include Republican Reps. Nicole Malliotakis, Nick LaLota and Andrew Garabino of New York, Tom Kean of New Jersey and Young Kim of California. “Once again, we are working to bring tax relief to New Yorkers from the federal level because Democrats like Hochul & Adams keep abusing our state’s taxpayers,” Malliotakis posted on X Wednesday. Trump’s signature tax law that passed during his first term in 2017, the Tax Cuts and Jobs Act (TCJA), set the SALT cap at $10,000 for federal returns. The TCJA notably expires at the end of this year if Congress does not extend the cuts by passing a new tax package. Raising or fully repealing the cap on state and local taxes overwhelmingly benefits high-income earners, according to an analysis from the Tax Policy Center (TPC). Households making roughly $60,000 or less would not receive a tax cut in the event the SALT cap is repealed, the TPC analysis said. GOP lawmakers representing districts in blue states that face high state and local taxes, such as Lawler, are advocating for raising the SALT cap as part of Republicans’ negotiations to extend the tax cuts passed in 2017. “The 10,000 cap is woefully insufficient,” Lawler told Bloomberg TV this week. “It’s had a negative impact on states like New York.” “Taxpayers should not be penalized by living in a high-tax state. This is double taxation,” Lawler added. “And for those of my colleagues that say this is somehow a subsidy — the fact is that New York contributes more to the federal government than it receives and more than some of these states in which my colleagues will claim that they don’t want their taxpayers subsidizing New York. But the reality is — it’s the other way around.” Lawler has also advocated for completely eliminating the SALT deduction. Fully repealing the SALT cap while extending the rest of the TCJA tax cuts would cost $1.2 trillion over a decade, according to an analysis from the Committee for a Responsible Budget. (Featured Image Media Credit: Screen Capture/CSPAN)

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