Republican senators are considering placing a $30,000 cap on the state and local tax deduction as a compromise between current law and the more generous limit in the House’s version of President Donald Trump’s tax bill, a key GOP negotiator said.
Senator Thom Tillis, a moderate Republican involved in the talks, said Republican senators are trying to reduce the House-passed $40,000 SALT limit to at least $30,000.
Senate Finance Committee Chairman Mike Crapo told lawmakers that SALT will likely end up below $40,000, without citing a specific figure, according to North Dakota Senator John Hoeven. And Senate Majority Leader John Thune told Fox News that he’s looking for ways to dial back the SALT cap that would be palatable to the House.
House Speaker Mike Johnson, who squeaked the House bill through by a single vote, said he is “very concerned” about any changes to SALT.
“I’m on the phone constantly with senators to let them know we have a very delicate balance over here,” Johnson said.
Republican senators met for roughly two hours behind closed doors Wednesday afternoon to discuss the details of the bill, which the Senate is aiming to pass later this month.
But the details are taking longer to hash out than many Republicans originally planned. GOP senators, who initially projected they’d be able to release bill text this week, left the meeting saying legislation might not be available until Monday or Tuesday.
SALT was a core issue in the House, where Republicans from high-tax states like New York, New Jersey and California threatened to block the bill without a substantial increase to the current $10,000 SALT cap.
But SALT isn’t a concern in the Senate, where there are no Republicans representing states where the deduction is a political priority.
“It’s hard because we don’t have any senators from SALT states,” said Republican Senator Markwayne Mullin. “We are searching for a compromise.”
Mullin said he has already spoken on the issue with New York Republican Mike Lawler, a key proponent of the increased SALT cap.
“I hope they don’t touch SALT too much,” Representative Lisa McClain, a Michigan Republican, told Bloomberg TV on Wednesday. “That was one of our biggest issues in the House. That just can’t be touched.”
Senators are also considering revising a levy on foreign investors, which has become known as the Section 899 “revenge tax.” That has sparked fears on Wall Street that it could make it difficult for foreign companies and individuals to invest in the U.S.
North Dakota Senator Kevin Cramer said they are looking to “blunt” the effect of that provision and potentially delay its implementation, but that Republicans want to preserve it as a “tool” to use as leverage to prevent a proliferation of other countries imposing digital services taxes on U.S. tech companies.
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