The Senate's version of President Donald Trump's tax bill calls for a $10,000 cap on the state and local tax deduction — a placeholder figure as Republicans remain divided over the valuable tax break.
The draft bill — slated to be released later on Monday — includes the current $10,000 SALT cap, according to a person familiar with the matter. But the Senate will continue to negotiate the deduction as it aims to pass the legislation by a self-imposed July 4 deadline.
The House version of the bill calls for a $40,000 SALT cap, with some limits for claiming the write-off based on income. Some House lawmakers from high-tax states have threatened to block the legislation if the Senate lowers that cap.
The $10,000 language suggests that the Senate is willing to engage in a high-stakes and politically divisive negotiation to reach a SALT cap that is far lower than the $40,000 the House agreed upon.
Representative Mike Lawler of New York called a $10,000 cap "DEAD ON ARRIVAL." Fellow New York Representative Nicole Malliotakis said the Senate draft is "insulting" and a "slap in the face."
"The $40,000 SALT deduction was carefully negotiated along with other tax provisions by the House of Representatives and we all had to give a little to obtain the votes to pass the Big Beautiful Bill," she said in a
Senate Majority Leader John Thune said on Fox News Sunday there is no real interest among Republicans who hail from low tax states to raise the SALT cap to the $40,000 level called for in the House-passed version.
"I think at the end of the day we'll find a landing spot. Hopefully that will get the votes we need in the House, a compromise position on the SALT issue," Thune said.
Raising the SALT cap to the House level would cost some $350 billion and Senate Republicans would prefer to spend that money extending temporary business tax breaks they argue are more pro-growth.
House Speaker Mike Johnson said he is calling on Senate leaders to preserve the House deal as much as possible.
