Staff Reports
Despite Donald Trump’s aspirations to usher in a flurry of conservative policies from the moment he steps into the Oval Office, a brewing storm over the SALT (state and local tax) deduction could turn his plans into a game of political whack-a-mole. The President-elect, along with House Republican leaders, is itching to push through a hefty “reconciliation” bill tackling hot-button issues like border security, tax reforms, and energy policies. However, the slim GOP majority may be more a hindrance than a help, as tensions bubble up over how to handle SALT deductions.
The Great SALT Debate has emerged as the central character in this political drama, pitting Republicans from high-tax blue states against their low-tax red counterparts. Those from places like New York and California are clamoring for an increase in the SALT deduction cap, left unsatisfied since it was capped at $10,000 per individual in 2017. Meanwhile, conservatives in states that prefer to keep more of their own money want the cap lowered or eliminated entirely. So, while Trump wants to unify the party behind his ambitious agenda, he’s instead finding himself navigating a bipartisan battleground of discontent.
Since Trump and his NY GOP minions passed a law without Dem support severely limiting the SALT deduction, working New Yorkers have lost tens of billions.
The GOP has total control of DC this year.
NY Rs must fully repeal the SALT cap—as they promised their constituents. https://t.co/w8D2BfXoD0
— Daniel Goldman (@danielsgoldman) January 8, 2025
In reality, the situation seems to have everyone playing political chicken, with both sides refusing to budge. Pro-SALT Republicans risk throwing a fit if their demands aren’t met, while anti-SALT conservatives are likewise prepared to dig their heels in, unwilling to let the fiscal ship sail without spending cuts to balance out any potential SALT increases. Trump’s efforts to compromise may be complicated further by the fact that he can only afford to lose a couple of votes from his own ranks, making consensus on the SALT issue critical.
Amid the chatter around SALT, reports have emerged hinting that Trump’s weekend was far from leisurely. He met with various GOP factions, including the hardline Freedom Caucus and the less ironically named SALT Caucus, trying to broker some semblance of unity. The meetings reportedly produced a few ideas to placate both camps, ranging from modest adjustments coupled with new spending cuts to indexing the cap to inflation so that it can adjust over time. Just like magic, dilemmas began to look solvable—if only it were that simple.
However, amid this bureaucratic back-and-forth, there might just be an unexpected lifeline: moderate Democrats. While responsibility for the resolution of the SALT spat seems to rest precariously on the shoulders of Republicans, some moderate Democrats have voiced a surprising willingness to offer their support in exchange for their own pet priority—an increase in the SALT cap. If Trump’s agenda gains traction due to a handshake with these Democrats, it’ll certainly come with the aftertaste of awkwardness. As the calendar ticks down to the inauguration, the hope is that this political soap opera finds a compelling conclusion rather than a drawn-out cliffhanger.
