New York delegation continues push for SALT deduction as new plans emerge

WASHINGTON — As President-elect Donald Trump promises to move swiftly on a new tax package once he takes office, competing proposals to address the SALT tax cap implemented during his first term are being floated on Capitol Hill.

A bill proposed Wednesday by Reps. Andrew Garbarino (R-Bayport), Tom Suozzi (D- Glen Cove), Laura Gillen (D-Rockville Centre) and a bipartisan coalition of other House members from mostly blue states calls for a full repeal of the $10,000 cap on state and local tax deductions that was enacted in 2018.

With a full repeal facing an uphill climb — as past efforts to reinstate the full SALT deduction have fizzled under both Republican- and Democratic-controlled Congresses — some House Republicans have started to weigh proposals that would increase the cap. A bill filed by Rep. Mike Lawler (R-Pearl River) calls for increasing the cap to $100,000 for individuals and $200,000 for married tax filers.

Meanwhile, several New York lawmakers are pushing back against a proposal floated by the conservative House Freedom Caucus this week that, according to Politico, calls for maintaining a SALT cap on businesses in exchange for easing the cap for residential homeowners.

The varying proposals come after a meeting last week between Trump and a number of New York, California and New Jersey House Republicans at his Mar-a-Lago estate to discuss the SALT cap.

A Trump transition source who was authorized to speak only on condition of anonymity told Newsday that at the meeting Trump expressed interest in reviewing options for an adjustment to SALT, but was not advocating for a specific proposal.

Schumer: Let cap lapse

Senate Majority Leader Chuck Schumer (D-N.Y.), in a Senate floor speech Friday, criticized the House Freedom Caucus proposal and urged congressional Republicans to allow the current SALT cap, which is set to expire at the end of this year, to simply go away.

"Let them expire, which they will right at the end of this year, and then they're gone for good, all of them," Schumer said.

In an interview after his remarks, Schumer told Newsday he was pushing for a full repeal, but "if we can’t get full repeal, we want it as high as we can go," referring to the cap.

Garbarino and Suozzi are co-chairs of the bipartisan House SALT Caucus.

Asked about the House Freedom Caucus proposal, Garbarino told Newsday: "We have yet to see any specifics on what a SALT cap for businesses would look like, but I’ll tell you this — we’re not robbing Peter to pay Paul. Any proposal that unfairly penalizes New Yorkers is a nonstarter."

Suozzi told Newsday he commended Garbarino and Rep. Nick LaLota (R-Amityville) for asserting they would withhold their support if SALT was not adequately addressed in a new Republican-led tax plan, saying "that’s not an easy thing to do, but that’s what needs to be done."

Potential compromise?

Suozzi, who previously sponsored three SALT relief bills passed by the House but ultimately never adopted by the Senate, said he would continue to push for a full repeal, but cited Lawler’s bill as a potential compromise.

"Of course, we should go for full repeal," he told Newsday. "But it'd be hard to complain if they could get to $100,000/$200,000." 

Gillen, when asked about which approach she supported, told Newsday in a statement: "I’m pushing hard for the full deduction — we had it before and it’s what taxpayers deserve. Right now, I’m having honest conversations with my colleagues on both sides of the aisle about what is the highest possible tax cut we can get for Long Island. Everything should be on the table and I’ll work with anyone who’s ready to negotiate."

LaLota, when asked why he did not sign on as a co-sponsor of the full repeal bill, said in his first term he "supported bills that either doubled the SALT cap or eliminated it entirely." But he said that under this new session of Congress "with serious negotiations underway, I cannot support merely doubling the cap, nor is an unlimited cap for the wealthiest New Yorkers realistic."

"Instead," he said in a statement to Newsday, "I will negotiate fiercely, even with my own party, to preserve the positive provisions of the 2017 tax reform, such as the [alternative minimum tax] fix and lower individual rates, while securing a higher SALT cap that delivers meaningful relief for as many middle-class Long Islanders as possible." 

Rep. Nicole Malliotakis (R-Staten Island), who appeared on a Fox News panel with Suozzi on Tuesday, said during the joint interview that a complete lifting of the SALT cap was unlikely because there wasn’t "an appetite within Congress or the American taxpayer to provide relief for the ultra wealthy," but she said negotiators were trying to find a fix that would offer relief to middle-class taxpayers.

"I think what we need to do is come up with the right number that will protect middle class families," Malliotakis said. "So this is targeted, it will not be a complete lifting of the cap altogether."

Sen. Kirsten Gillibrand (D-N.Y.) on Sunday is expected to hold a news conference alongside Gillen and other New York Democrats urging Republicans to restore the full SALT deduction.

By Laura Figueroa Hernandez

laura.figueroa@newsday.com@Laura_Figueroa

Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.