New York Republicans taking up SALT mantle in debt fight

New York Republicans are angling to raise the $10,000 state and local tax cap on federal deductions as part of ongoing negotiations over the debt ceiling.

On May 5, Rep. Nick LaLota (R-Long Island) introduced a bill that would push the SALT cap to $60,000 for single filers and $120,000 for joint filers.

Currently, income tax filers can only deduct $10,000 from their federal tax returns, even if they are paying much more in real estate taxes to their state and local governments.

The cap, which was enacted in 2017 by President Trump, hurts middle-class suburban homeowners in high-tax states like New York and New Jersey.

Before it, taxpayers would deduct all state and local real estate taxes from their federal income taxes.

“What I have shared with my colleagues is that my proposal is good for the nation’s longtime fiscal health,” said LaLota, who is keen for a deal as part of the looming debt standoff.

“We are looking to do things in the federal budget to right this ship,” he said.

Rep. Mike Lawler (R-Rockland County) said the issue “came up in discussions” around the broader debt deal. “My objective is to get the SALT cap lifted. There are going to be a lot of avenues to do that over the course of this congress.”

Rep. George Santos (R- Long Island), fresh off a federal indictment for fraud and money laundering said he would refuse to vote for any final debt limit deal that did not include an increase in the cap — a significant threat given the GOP’s paper-thin House majority.

“We have got to give the American people relief,” Santos said. Both Lawler and LaLota said they would not hold the debt deal hostage to SALT and said they would not work with Santos in any capacity on the issue.

“I don’t take anything that comes out this mouth seriously,” LaLota said of Santos.

Both Santos, Lawler, and Long Island Rep. Andrew Garbarino have introduced bills to lift the cap — the latter two with Democratic co-sponsors.

“Our delegation is committed to working together to provide tax relief for New Yorkers and we’re in the process of evaluating what that relief is, and the best vehicle to carry it,” said Staten Island Rep. Nicole Malliotakis.

In the last Congress, when Rep. Nancy Pelosi held the Speaker’s gavel, moderate Democrats such as Reps. Tom Suozzi, Josh Gottheimer, and Mikie Sherrill led the charge among their colleagues for raising the cap.

The trio ostentatiously promised they would not support President Biden’s budget-busting spending plan without a SALT cap increase.

All three ultimately voted for the so-called Inflation Reduction Act — without a SALT deal.

Republicans have already voted on a debt ceiling bill — which did not address SALT, and President Biden has declared it “dead on arrival,” over the bill’s Draconian spending cuts.

The two sides still remain far apart from a final deal.