House Republicans push to raise SALT deduction cap to $30,000

In the United States, on May 9, 2025, House Republicans unveiled a comprehensive tax proposal amid ongoing discussions in Congress regarding federal tax reforms. The proposed legislation seeks to raise the state and local tax (SALT) deduction cap from $10,000 to $30,000 for individuals with a modified adjusted gross income of $400,000 or less. The SALT deduction cap has been a critical point of contention, particularly impacting taxpayers in high-tax states such as California, New Jersey, and New York. This change represents a significant shift from the limit imposed by the Tax Cuts and Jobs Act of 2017. Without intervention from Congress, the existing cap is set to expire at the end of 2025, which has led to urgent discussions among lawmakers. Recent analysis indicates that upper-middle-income households would benefit the most from this increase, raising questions about the distribution of tax benefits among various income groups. House Republicans also aim to make several provisions of the 2017 Tax Cuts and Jobs Act permanent, including a temporary increase in the standard deduction and an enhancement of the child tax credit to $2,500 through 2028. Meanwhile, the Senate Republicans are pursuing a more conservative approach, including $1.5 trillion in tax cuts over a decade and selective new tax reductions that would sunset after ten years to alleviate potential fiscal impacts. Furthermore, the House has proposed substantial cuts to Medicaid, totaling approximately $880 billion over the next decade, as a means to finance these tax cuts. Critics of the proposed reforms argue that these benefits disproportionately favor high-income earners while jeopardizing funding for essential social programs, amplifying the ongoing debate on tax policies and their overall economic implications.