Overview

• The House Ways and Means Committee approved raising the SALT deduction cap from $10,000 to $40,000, with a phase-out for incomes above $500,000 and annual adjustments of 1%.
• The change, a key demand from blue-state Republicans, highlights divisions within the GOP and was leveraged to secure their support for the broader tax package.
• Analysts note the policy overwhelmingly benefits high-income households, particularly those earning between $430,000 and $1 million annually, while most taxpayers remain unaffected.
• The bill lacks provisions to offset revenue losses from the increased cap, raising concerns about its impact on the federal deficit as it heads to the Senate.
• President Trump, despite criticizing the SALT cap increase as favoring high-tax states, has urged lawmakers to pass the package without changes.