House Republicans are moving one step closer to making President Donald Trump’s “big, beautiful bill” a reality. Not everyone is on board, and one of the main sticking points is the SALT (State and Local Income Tax) deduction.
Pro-SALT Republicans want to increase the deduction from $10,000 to $30,000 for those making less than $400,000. New York Representative Mike Lawler and other blue-state Republicans want an even higher cap. But as Marjorie Taylor Greene explains on X, “A $2 million dollar house in Lawler’s district is going to have property taxes around $30,000+ per year, so the $30,000 SALT cap would allow them to deduct their entire property taxes off their federal taxes if they make under $400,000 per year!!!”
The $30k cap would allow nearly every American to deduct their full property taxes, but making it higher would be too costly — not to mention shielding the politicians who raise those taxes. Members of the House Freedom Caucus are already worried about raising the cap without making spending cuts elsewhere. Opponents of the bill are coming from all directions, and the biggest obstacle right now is overcoming objections in the Senate. Among Republicans, Kentucky’s Rand Paul wants more spending cuts, Wisconsin’s Ron Johnson doesn’t like the bill’s structure, and Missouri’s Josh Hawley doesn’t want changes to Medicaid. They’ve all pledged to vote against it.
As the saying goes, you can’t please everyone, especially in Washington politics. So the GOP must tread carefully to avoid losing any votes in either chamber. Fortunately, they’re making real progress, and American taxpayers can be encouraged.
One benefit of the messy sausage-making process is lower taxes for millions.
“For the top sliver of taxpayers, it gives a permanent extension and expansion of expiring tax cuts from 2017, coupled with some new limits,” The Wall Street Journal reports. “Middle-income households would get permanent tax-cut extensions, too. They would also gain temporary tax cuts, including a larger standard deduction and child tax credit, and targeted benefits for senior citizens and people receiving tips and overtime pay.”
Politico adds, “The overall plan would have some of their tax cuts take effect this year, so that people will see a difference in their tax refunds next year, ahead of the midterm elections.”
Unsurprisingly, Democrats are calling it a tax cut for the rich. But in reality, many small business owners pay taxes at the highest individual rates, so the tax cuts would primarily benefit the hard-working middle class and those who create businesses and hire workers.
Another aspect of the bill includes taking money from the radical Left’s so-called Green agenda and boosting energy production.
“The House Energy and Commerce Committee on Tuesday night approved key portions of the GOP megabill central to President Donald Trump’s domestic agenda, clawing back billions of dollars in unspent funds from the Democrats’ 2022 climate law and speeding up permitting for fossil fuel projects,” reports Politico.
Other perks for taxpayers include no taxes on tips or overtime, no tax on auto loan interest, increasing the child tax credit to $2,500, and “a section that would allow middle-and low-income seniors to deduct an extra $4,000 for each taxable year,” according to The Daily Wire. The Associated Press reports, “There’s also [a] larger standard deduction, $32,000 for couples, a boost to the Child Tax Credit and a potentially higher cap of $30,000 on state and local tax deductions, known as SALT, that’s still being negotiated.”
Proposed cuts to Medicaid and the Supplemental Nutrition Assistance Program are expected to target fraud and abuse, not benefits. Republicans want states with a record of overpayments to take on more of the costs of SNAP, saving around $300 billion. The plan would only reduce federal funding of SNAP from 100% to 95%.
One piece left out of this bill is Trump’s idea to raise taxes on millionaires, which is now off the table. According to the Washington Examiner, “Trump had reportedly been considering the idea of letting the top individual rate revert back from 37% to 39.6% for taxpayers earning over $2.5 million.” That’s not in the cards.
The Hill reports, “While there had been consideration of letting the top tax rate expire, which would mean that the highest tax bracket for regular income would increase to 39.6 percent, this provision was left out. Conservative tax groups had railed against that possibility.” Taxing the wealthiest Americans wouldn’t reduce the debt but would penalize those who build companies, hire millions, and invest in our country. And it would go against a core GOP principle, giving Democrats fodder.
Watching the budget process is like watching sausage being made in a factory. It’s not pleasing to the eye, but the final product is what matters. The final bill isn’t going to be perfect, and the growing national debt will remain a dark cloud hanging over the process, but at least the tax portion seems to be a step in the right direction, putting more money in our pockets and giving President Trump a significant political victory.
