President Donald Trump casually did a 180-degree swerve on a hotly contentious issue standing in the way of the House GOP consensus on the "big, beautiful bill" on tax cuts, energy deregulation, and border security, an analyst said Tuesday.
And he did it in a way that hung some of the swing-district Republicans out to dry.
"Trump has completely flipped on salt," wrote Jake Sherman of Punchbowl News, referring to the state and local tax deduction that shifts the burden of high state and local government taxes to the federal government. It's become a sticking point in the budget.
"He says raising the cap benefits Democratic governors. 'We don’t want to benefit Democrat governors,' Trump said in response to my question."
On Tuesday, in a speech at the Capitol, Trump proclaimed he's not a huge fan of the state and local tax deduction because, "These are all very blue states that I don't really believe — if we had honest elections, I think I would've won California, I would've won New York. I even think I would've won Illinois." He added that “We don’t want to benefit Democrat governors.”
This is a seismic change, as during the 2024 campaign Trump advocated for raising the SALT cap.
Trump himself instituted the SALT cap in the first place when he signed the GOP's 2017 tax cut bill. That legislation imposed a limit of $10,000 on the deduction, which is taken by wealthier households in mostly higher-tax states like New York, New Jersey, and California to offset the costs of paying those taxes. At the time, it was seen as a pain-free source of revenue for Republicans because it would mostly fall on Democratic-controlled areas.
But it also amounted to a fairly sizable tax increase on wealthy people in those states, and wealthier areas that back Republicans or can be competitive. This has led Republicans in those states, like Rep. Mike Lawler, to push heavily for a full repeal of the cap. But GOP hardliners have fought back, saying they don't want to restore a tax benefit that flows mostly to Democratic states.
In the proposed outline of the bill, House GOP leadership offered an increase of the cap from $10,000 to $30,000, with the caveat of limiting the deduction to people making below $400,000 a year. Many of the swing-district Republicans, who have pledged to their own constituents substantial SALT relief, have pushed back on this offer, claiming it is not good enough.