Trump traps Senate GOP with flip-flop on taxes
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Trump's surprise post on SALT deductions Tuesday has forced Senate Republicans into a pickle: contradict their party's leader or their old positions.
Why it matters: For Republican leaders, it's a taste of what's to come if Trump wins back the White House.
- They'll have to harmonize their own positions — in real time — with a president who is constantly changing his.
Trump posted he would "get SALT back."
- That's a strong indication he wants to let those in high-tax states deduct more than $10,000 from their federal taxes — a limit he championed in his 2017 Tax Cuts and Jobs Act.
Zoom in: "We'll take a look at all the suggestions," Senate Minority Whip John Thune (R-S.D.), who is running for leader, told reporters, noting it "got litigated extensively in 2017."
- "I don't think we ought to be subsidizing state taxes," Sen. Rick Scott (R-Fla.) told Axios repeatedly, adding Republicans need to win the House, Senate and White House first before there's a real discussion on what to do about SALT.
- "I personally, at this point in time, believe we should extend the TCJA SALT provisions," said Sen. Mike Crapo (R-Idaho), the ranking Republican on the Finance Committee. "But like I said, everything's up for negotiations."
The other side: The new Trump idea does have support from Majority Leader Chuck Schumer (D-N.Y.) who said he has "always been for eliminating the cap on SALT."
- Schumer called the Trump tax bill "a nasty piece of legislation," which was "aimed at the blue states."
What we're watching: Republicans in blue states, especially in New York, have made repealing the SALT cap a calling card and have been willing to challenge their Republican colleagues on it.
- Trump's new position might make it easier for them to return to Congress.
State of the play: The $10,000 SALT cap expires at the end of 2025.
- If Trump — or Harris — does nothing, taxpayers in high-tax states will be able to deduct an unlimited amount from their federal returns, lowering the overall tax bill.
The bottom line: Removing the $10,000 SALT cap would cost an estimated $1.2 trillion over a decade, according to the Committee for a Responsible Federal Budget.
- An estimated 92% of the benefit would go to the top 10% of earners, according to CRFB.
