House Republicans target narrow tax cuts after New Yorker revolt
New York House Republicans scored a win on Wednesday, strong-arming leadership into a standalone tax cut bill for married households.
Why it matters: New Yorkers were promised a vote on the measure after embracing Freedom Caucus-style tactics to gum up the House floor.
- Speaker Mike Johnson (R-La.) and Ways and Means Chair Jason Smith (R-Mo.) met with the New Yorkers in prolonged meetings on Tuesday over the bipartisan tax deal that's expected to get a vote Wednesday evening.
- The bipartisan tax deal, hatched by Smith and Democratic Sen. Ron Wyden, will bolster the child tax credit and provide research and development tax credits for businesses.
- But its lack of change to the deduction cap on state and local income taxes (SALT) angered Republicans from higher tax states.
Zoom in: The 2017 tax cuts signed by former President Trump created a $10,000 SALT deduction cap. This hit upper-middle class earners hard in higher-tax states.
- The new standalone bill would eliminate the "marriage penalty" that keeps the cap the same for single or joint filers — raising the cap to $20,000 for people filing jointly.
- It will likely also include an income threshold to control costs, capping the benefit to those who earn under a yet-to-be-determined number that's expected to be between $500,000-$1 million.
- One source involved with the talks told Axios the bill is expected to be brought up in coming days with a closed rule not allowing for amendments.
What's next: Supporters of the SALT tax bill are optimistic it will pass the House with bipartisan support.