As the Senate begins to discuss President Donald Trump and the Republican-led large-scale tax cut bill that barely passed the House of Representatives, the conflict surrounding the increase in the SALT deduction limit is emerging as the biggest variable.
According to a report on the 23rd by the congressional journal The Hill, some Republican lawmakers in the Senate are taking the position that the increase in the local tax deduction limit to $40,000 included in the tax cut bill passed by the House of Representatives needs to be changed. These lawmakers are demanding that the local tax deduction limit be lowered to $20,000 during the Senate debate.
The measure that limited the deduction limit for local taxes such as property taxes when filing federal income taxes to $10,000, introduced in 2017, is being criticized for placing a greater tax burden on residents of areas with high property tax burdens such as New York, New Jersey, and California.
Accordingly, Republican members of the House of Representatives, whose districts are heavily burdened with local taxes, have not backed down from their stance that they will vote against the tax cut bill promoted by the Republican leadership unless the local tax deduction limit is raised.
In the end, House Speaker Mike Johnson and Republican members of the House of Representatives from New York and New Jersey agreed to raise the local tax deduction limit from the current $10,000 to $40,000, which allowed the tax cut bill to pass by a one-vote margin in the House plenary session on the 22nd. However, there are demands that the local tax deduction limit, which was raised to $40,000 in the House, be lowered to $20,000 in the Senate. I
n particular, conservative members of the House of Representatives believe that the budget cut level in the House bill is insufficient and that revisions are inevitable. However, if the local tax deduction limit is lowered again in the Senate bill, it is expected that Republican members of the House of Representatives from New York and New Jersey will strongly oppose it.
If the tax cut bill processed in the House is revised in the Senate, the Senate bill must be re-reviewed in the House. The Republican leadership is concerned that if House Republicans who demand an increase in the local tax deduction limit vote against the Senate bill, it will be difficult to pass the bill. Although the Republican Party has a majority in the House, the gap in the number of seats between them and the Democratic Party is not large, so if the lawmakers who demand an increase in the local tax deduction limit do not vote in favor, the Republican Party’s tax cut bill will face great difficulties.
The Republican leadership is trying to find the optimal point to secure the support of as many lawmakers as possible, but it is uncertain what conclusion will be reached.