Johnson offers $40,000 SALT deduction cap with income limits
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Speaker Mike Johnson speaks to members of the press as he arrives at the U.S. Capitol on May 19, 2025 (Photo by Alex Wong/Getty Images)
House Speaker Mike Johnson offered GOP holdouts a detailed proposal on Monday to set the SALT deduction cap at $40,000 for anyone who makes less than $751,600 a year.
Why it matters: But Johnson (R-La.) also offered the SALT members an entirely different option: Figure out the math yourself, he said, according to a person familiar with the matter.
- Johnson offered a crucial caveat: they still need to stay within the fiscal constraints of the Ways and Means framework, which has only has a set amount of money to spend on the SALT portion for the tax portions of the bill.
- Johnson needs to resolve the SALT issue this week, but he doesn't have unlimited money to do it with.
- "We continue to work on it," Johnson told reporters last night. "It's not a final resolution yet and I think we're getting very close."
- Punchbowl News first reported, on X, some of the details in Johnson's offer.
Driving the news: Members of the SALT caucus appeared to be more interested in Johnson's second option.
- Rep. Andrew Garbarino (R-N.Y.) told reporters last night that "we have to follow up with Joint Committee on Tax and CBO on" on how much different proposals will cost.
- "They hope to have some numbers back to us by the morning."
Zoom out: Johnson wants to signal flexibility to the half-a-dozen members who are threatening to vote against President Trump's one big, beautiful bill if they don't get more relief for their constituents who are hit with high taxes in blue states.
- The SALT caucus had been eyeing an additional $200 billion in headspace based on the Ways and Means instructions to authorize a total of $4 trillion in spending.
By the numbers: There are firm income limits and phase-out in Johnson's proposal, according to the person familiar with the matter.
- For years 1-4: The deduction would be at $40,000 for anyone making less than $751,600. That includes individual and joint-filers.
- For anyone making more than roughly $850,000, the deduction would be $10,000, with a $20,000 deduction at the $800,000 threshold.
Then starting in year five, both the deduction and the income levels drop.
- For anyone making less than $400,000 a year, the cap is at $30,000 in state and local taxes.
- For anyone in the $400,000 to $450,000 range, the deduction would be $20,000. For $500,000 and up, the deduction is back at the $10,000 level.
