Harrop: Lack of SALT deal could doom GOP’s ‘big, beautiful bill’

By Froma Harrop / Creators.com

At least six congressional Republicans are demanding a radical fix in the 2017 tax law targeting residents of high-income states. If they don’t get it, they may sink Donald Trump’s tax-and-spending package, his “one big beautiful bill.”

And who can blame these reps from New York, New Jersey and California? At issue is the unfair cap on the state and local taxes (SALT) their constituents may deduct from federally taxable income. The SALT deduction, unlimited before 2017, was set at a maximum $10,000.

What made it sweet to other Republicans was that it paid for some of those tax cuts by milking taxpayers in wealthier Democratic states. And that has made voters in key suburban districts sore.

What makes this attack on the SALT deduction outrageous? For starters, it taxes income that Americans have already paid in taxes. Secondly, incomes in these states are higher because their everyday costs are higher. Teachers, road workers and other public employees must be paid more just to maintain the living standards enjoyed elsewhere.

Defenders of the cap argue piously — and wrongly — that the SALT deduction is a tax break only for rich people. It’s true that taxpayers with higher incomes tend to get the most out of the deduction, but a cop married to a nurse in New York, New Jersey or California can easily have a combined income of $200,000; and no one would call them rich given housing prices.

In decidedly middle-class Levittown, on Long Island, homeowners typically pay a property tax of about $16,000. Then there are state income taxes.

If Washington, D.C.’s objective is to raise more revenue from higher-income Americans, then fine. Just raise the federal tax brackets for high incomes everywhere in the U.S.

The most obnoxious argument for the SALT cap is that it forces “profligate” state governments run by Democrats to restrain their own taxes. What state and local governments levy in taxes should be no business of the federal government. Americans unhappy with their local tax regimes can move elsewhere, and some do.

But many regard superior education systems and other public amenities worth the higher taxes. Republicans should note that making it harder to pay good salaries to police is, in essence, a form of defunding the police.

Raising the cap on this deduction may require congressional lawmakers to find the revenues elsewhere. Well, that’s too bad.

House Ways and Means Committee Chair Jason Smith represents the most rural district in Missouri. It’s easy for him to say Republicans from high-tax states may have to settle for an “unhappy” compromise on the SALT deduction. By that, he means raising the cap to a meager $30,000.

Republican reps from these swing districts are having none of it, frankly, because their jobs are at stake. They know that the Republican brand has already fallen for their voters, given the toll tariff chaos has taken on their businesses.

There’s a reason President Trump retreated on making New York Rep. Elise Stefanik United Nations ambassador. He doesn’t want to risk a special election that may replace her with a Democrat. After 2022, Republicans flipped at least four New York districts, without which they wouldn’t now enjoy a House majority.

New York Republican Nick LaLota spoke for others when he told reporters that the SALT talks are far apart, on the 25-yard line with 75 yards to go. LaLota’s district covers eastern Long Island.

If House Republicans think they can threaten these “SALT Caucus” members for killing one of Trump’s top priorities, they need hearing aids. The general election, not primary challenges, is what these politicians should worry about most. Democrats already see opportunity, and the elected Republicans know it.