Why blue state Republicans say they’re willing to sink Trump’s agenda
New York Republicans say they will vote against President Donald Trump’s tax cuts and budget bill unless it includes a state and local tax deduction. The lawmakers have significant leverage given House Republicans can only lose three votes to get the bill approved.
“The fact is that they need to address the cap on SALT as part of this bill, or there won’t be a bill,” Rep. Mike Lawler, R-N.Y., told Straight Arrow News.
What is SALT?
The state and local deduction, or SALT, allows individuals to write off local taxes on their federal return. It’s particularly important to those in high tax states like New York, New Jersey and California. The 2017 Tax Cuts and Jobs Act reduced the deduction from $25,000 to $10,000. New York Republicans now say they want the cap eliminated.
“There needs to be an adjustment to SALT. It is the right thing to do for middle-class families in New York and California and other states. They were shortchanged in the last bill when SALT was reduced to $10,000,” Rep. Nicole Malliotakis, R-N.Y., explained to SAN. “It needs to be adjusted, but it needs to be adjusted in a reasonable manner where it’s targeted to the middle class.”
The final numbers are still being negotiated. Malliotakis said they have to find a compromise that will allow those making less than $400,000-$500,000 to claim the deduction.
President Trump, a native New Yorker, has repeatedly said he supports SALT.
Why are some opposed to a tax deduction?
Republicans who oppose the write-off contend it’s essentially a federal subsidy. They say high tax states should find a way to lower their taxes, not rely on a deduction for relief.
“That’s their deal. They want to talk tough. But the reality is, Tennessee should not be supplementing their bad decisions,” Rep. Tim Burchett, R-Tenn., told SAN.
What are donor states?
Blue state Republicans counter by pointing out that their states are what are known as donor states. In other words, their states’ taxpayers send more money to the federal government each year than they receive.
For instance, in 2023, New York paid about $375 billion to the federal government but only received $286 billion in federal assistance — a difference of $89 billion. Alabama, on the other hand, receives $41 billion more from the federal government than it sends.
Approximately 31 states, plus Washington, D.C., are recipients, while 19 states are donors.
“This is an issue of double taxation. It’s an issue of fairness for my colleagues that talk about bad blue state policies,” Lawler. “The fact is, New York is a donor state. Many of my colleagues from red states actually get more money from the federal government than tax revenue that is sent to the federal government.”
There are 19 Republicans who represent districts in New York, New Jersey and California. It’s unclear exactly how many are willing to vote against the tax bill if SALT isn’t included, but it will only take three Republican “no’s” to sink it.
Ella Rae Greene, Editor In Chief
