Former President Trump called for the elimination of the cap on the state and local tax deduction set by his landmark tax bill as the top House Republican said extending provisions from that law would be an early 2025 priority for the party.
Trump, the Republican presidential candidate, made waves September 17 by appearing to indicate he wants to overturn the $10,000 SALT cap established by the Tax Cuts and Jobs Act in a post on Truth Social about his upcoming campaign rally on Long Island, New York. Trump signed the TCJA into law in 2017.
“I will turn it around, get SALT back, lower your Taxes, and so much more,” Trump wrote.
The Trump campaign didn’t clarify Trump's stance on the cap in a request for comment from Tax Notes, instead bashing Democratic presidential candidate Kamala Harris’s “out of control inflationary policies” and saying Trump plans to quickly advance tax relief for working people and seniors should he take office.
Over in Congress, House Speaker Mike Johnson, R-La., spoke to how Republicans plan to handle extending provisions from the TCJA should his party take control of the Senate and White House and maintain control of the House.
Johnson said at an America First Policy Institute event that Republicans’ economic plan for the first 100 days in 2025 would extend and build on the TCJA, and he named as top priorities restoration of immediate expensing for research and development costs as well as maintaining the lowered tax rate for U.S. corporations’ foreign-derived intangible income, the doubled child tax credit and doubled standard deduction, and full expensing of bonus depreciation.
“The smart approach is broad-based tax policy that unleashes the American entrepreneurial spirit, and encourages research, development, and manufacturing,” Johnson said.
House Republicans, including Johnson, have claimed that Vice President Harris plans to repeal the TCJA by allowing sunsetting provisions to expire, although the Harris campaign has said she plans to maintain President Biden’s commitment not to raise taxes for households making less than $400,000 — a promise that would be broken should the TCJA’s lowered individual tax rates sunset.
Johnson called for cuts to the Inflation Reduction Act’s clean energy provisions, referring to the bill as wasteful and citing Congressional Budget Office estimates that the cost of the credits is more than double the initial score (JCX-18-22) from the Joint Committee on Taxation.
The speaker also said he intends to prioritize a reduction in the size of the federal workforce, a proposal also found in Project 2025, the 900-page roadmap for the next Republican president created by the Heritage Foundation. IRS employees have voiced concern over the plan’s proposal to reinstate a Trump executive order that would make it easier to fire federal employees and convert more federal leadership positions into presidential appointments.
Johnson called the Biden administration’s economic and government spending policies a “big socialist experiment” that he characterized as doomed to fail and removed from reality.
“Every time we turn around they’re trying to do more of what that ideology requires,” Johnson said. “They want another government program. They want another federal agency. They want more IRS agents. They want more taxes. They want more government spending.”
He also said Republican tax policies will encourage work, a priority he attempted to juxtapose against ideas from Democrats.
“But unlike the Democrats’ proposal, we will ensure that our tax policy respects the dignity of work and it doesn’t pay people for staying out of the workforce,” Johnson said.
Encouraging work has been an oft-repeated Republican talking point since the House passed the Tax Relief for American Families and Workers Act (H.R. 7024) January 31, a bill that includes extension of expired business tax provisions from the TCJA alongside an expansion of the child tax credit. The legislation has been stuck in the Senate because of Republican pushback that the child tax credit’s lookback income provision discourages work, despite wide Republican support for the bill in the House, including from Johnson.
SALT Renegotiated?
The cap on the SALT deduction was a partial offset for the tax cuts in the TCJA when it passed in 2017, and it is scheduled to expire at the end of 2025. Eliminating the SALT cap would cost an estimated $1.2 trillion over 10 years, according to the Committee for a Responsible Federal Budget.
Senate Majority Leader Charles E. Schumer, D-N.Y., who has long campaigned against the SALT cap, slammed Trump’s possible new stance to reporters and in a post on X.
“I’ve always been for eliminating the cap on SALT. I think it was a nasty piece of legislation supported by Donald Trump aimed at the blue states, which help the people of their states in many ways,” Schumer told reporters.
Rep. Josh Gottheimer, D-N.J., similarly criticized Trump’s pivot in a post on his campaign's X account.
“President Trump gutted SALT and raised taxes on hardworking middle class Jersey families. Now he wants to fix the problem he caused? And without any specifics? Sounds like the arsonist volunteering at the fire department," Gottheimer said.
Trump is scheduled to hold a rally in Uniondale, New York, September 18. A handful of New York Republicans in Congress have been some of the most outspoken advocates for eliminating or changing the SALT cap.
Rep. Michael Lawler, R-N.Y., praised Trump’s pivot in a September 17 statement, and Rep. Nick LaLota, R-N.Y., called the stance an exciting development that he hopes could change the minds of House taxwriters.
“I was speaking just a moment ago to the House Ways and Means Chairman [Jason Smith, R-Mo.], who I told it seems like we have some new marching orders, and now the Ways and Means Committee should want to embrace the former president's view on this,” LaLota said.
Asked if he had concerns about whether Trump’s new view will hold given his approval of the TCJA’s SALT cap at the time of passage, LaLota said he hopes the change can lead to more bipartisan agreement on the measure.
“I would say that's a positive, that if he has a new view on it, that can empower other members to effectuate that change,” LaLota said.
Doug Sword contributed to this article.