Latest news with #SALT
CNBC
9 hours ago
- Politics
- CNBC
Rep. Nick LaLota: The House reconciliation bill as is puts us on the right track
Rep. Nick LaLota (R-N.Y.) joins 'Squawk Box' to discuss the fate of the GOP reconciliation bill, battle over the federal deduction for state and local taxes (SALT), Medicaid reform, whether the bill can ultimately pass both chambers of Congress, and more.
The Hill
10 hours ago
- Business
- The Hill
Don't pass a ‘Big Beautiful Blue-State Bailout' bill
As the Senate considers the One Big Beautiful Bill Act, blue state Republican House members are pledging to hold $4 trillion in tax relief hostage if the state and local tax or SALT deduction provision in the House-passed version is altered. The current language of the bill allows up to $40,000 in federal tax deductions for state and local tax expenses. Capping the SALT deduction at $10,000 was a big achievement of the 2017 tax bill. SALT is a blue state giveaway that shields politicians in high-tax states from accountability. Eliminating it entirely would pressure these governments to reform their fiscal ways. Although the House-passed bill thankfully would prevent a massive tax hike on millions of Americans, this egregious provision must be fixed in the Senate. SALT rigs the tax code in favor of the worst-managed states, forcing taxpayers in Florida and Texas to pick up the tab for New York City, Chicago, and San Francisco. This is simply unjust and antithetical to the very purpose of the tax code. Under current law, taxpayers who itemize can deduct up to $10,000 of SALT from their federal taxable income, reducing their federal tax bill. Capping this giveaway was an important policy win of the Trump-Pence Tax Cuts and Jobs Act and paid for lowering the corporate tax rate. But even with the current limits, taxpayers in fiscally responsible states are subsidizing bloated governments elsewhere. For high-income earners, this deduction reduces federal taxes owed by more than $400 for every $1,000 in state and local taxes paid. Instead of being content with the wildly generous $10,000 deduction, the SALT Caucus demands a dramatic lifting of the cap — or else subject Americans to the trillions of dollars in tax increases in 2026. Voters in places like California and New York continue to elect politicians who overspend and overtax in a vicious cycle that leaves American families picking up the tab. Constituents of the SALT Caucus should focus their energy on restoring fiscal sanity to their own states before asking Texas, Florida, and the rest of middle America to pick up the tab. Unsurprisingly, before the cap was imposed in 2017, California and New York (population 59 million) received 33 percent of SALT benefits while less than 7 percent of such benefits went to residents of Florida and Texas (combined population: 55 million). Thanks to SALT, Blue state residents pay thousands less in federal taxes per year. To illustrate a SALT deduction with a proposed $40,000 cap, consider two hypothetical families — one in New Jersey and one in Tennessee. Both are married with $400,000 personal income each year, spending $100,000 on consumer goods, with a residence worth $700,000. The family in Tennessee family would pay $11,060 in state and local taxes per year, with a SALT deduction value of $3,539. The family in New Jersey would pay $36,920 in state and local taxes per year, with a SALT deduction of $11,814. The SALT subsidy results in our Tennessee family paying a whopping $8,275 more in federal taxes than its counterpart in New Jersey. This family is funding public schools, roads, police, and fire not only in the Volunteer State but in the Garden State as well! Millions of American families have left New York, New Jersey, and California for lower-tax states. Meanwhile, the SALT Caucus insists these political refugees fund the very, bloated governments from which they fled. SALT subsidy proponents denounce repeal as a federal 'revenue grab.' But making the current $10,000 SALT cap permanent would turbocharge the economy by providing nearly $1 trillion over the next decade for broad-based permanent tax cuts. Rep. Mike Lawler (R-N.Y.) derides SALT repeal as 'double taxation.' He is wrong on two counts. True double taxation occurs when one level of government taxes the same income twice, like corporate income taxes followed by dividend taxes, which both hit shareholders. But federal and state taxes are levied by two distinct sovereign entities with distinct constitutional roles providing distinct public services. The only 'double taxation' related to SALT is that it requires Tennessee taxpayers to foot the bill of their own state, plus a legion of big-spending Blue states. Without the SALT deduction, taxpayers in high-tax states like New Jersey — burdened by public sector unions, corruption, and fiscal malfeasance — would feel the full weight of their states' policies. Residents would surely demand lower taxes and smarter budgets. Congress should prioritize job creators, investors, and workers rather than entrenched state bureaucracies. The tax code should reward innovation rather than reward egregiously high state and local taxes. It's time to end — not expand — the SALT deduction. Paul Teller is executive vice president of Advancing American Freedom, where Joel Griffith is a senior fellow.
The Hill
13 hours ago
- Business
- The Hill
Impasse over SALT cap deepens as House moderates stand firm
The impasse over the state and local tax (SALT) deduction cap is deepening as Senate Republicans and House moderates from high-tax blue states remain at a loggerheads, a stalled state-of-play that is threatening to thwart leadership's goal of enacting the party's 'big, beautiful bill' by July 4. Sen. Markwayne Mullin (R-Okla.) — a former House member and key liaison between Republicans in both chambers — spoke with a group of House GOP lawmakers in the SALT Caucus on Wednesday to discuss the issue, two sources familiar with the matter told The Hill, as top lawmakers hunt for a consensus on the cross-Capitol debate. Reps. Mike Lawler (R-N.Y.), Andrew Garbarino (R-N.Y.), Young Kim (R-Calif.) and Tom Kean Jr. (R-N.J.) were present, according to one of the sources. Leaders are trying to bridge the gap between the House's $40,000 SALT deduction cap for individuals making $500,000 or less and the Senate's proposal for a $10,000 cap, which matches the number in current law. SALT Caucus members have deemed the Senate's offer a nonstarter and are demanding that the House deal — which was the product of months-long negotiations with Speaker Mike Johnson (R-La.) — remains in the final product. After Wednesday's call, progress appeared elusive. 'We're still working on a deal. We're still running numbers on things. … A little premature, and I hope [the leaks] didn't damage us moving forward,' Mullin told The Hill on Thursday. 'We're not there. … We're in a good spot. We're not in a final spot.' The leak Mullin referred to was a report from Punchbowl News that the senator and SALT Caucus Republicans discussed keeping the $40,000 deduction cap in place but decreasing the income threshold from $500,000 — which would still allow filers a larger SALT deduction but limit it for higher-income earners, bringing down the price tag for the provision. Key SALT Caucus Republicans, however, are rejecting that idea, showing zero appetite for tampering with the deal they landed last month. 'The bottom line here is the Senate has a position of $10,000 — we're not accepting that,' Lawler told The Hill on Thursday. 'That's the reality. Never gonna vote for that bill.' Asked if he was open to negotiating to bring down the $500,000 income cap, Lawler responded: 'No, look, we negotiated our deal, this is the deal.' 'They need to just accept that this is the deal,' he added. 'This is the deal that we negotiated, and they should abide by it.' Rep. Nick LaLota (R-N.Y.), another vocal member of the SALT Caucus, sounded a similar note, telling The Hill that the compromise the group closed in June 'shouldn't be touched.' 'It earned the votes of Republicans with very different world views and to change it is to risk losing votes and tanking the whole bill,' he added. The New York Republican shut down any chance of changing the $500,000 income cap: 'I am done negotiating,' he said when pressed on if it was open to discussion. Senate Majority Leader John Thune (R-S.D.), to be sure, has said that the $10,000 cap in the Finance Committee's part of the megabill is a 'marker' for negotiations going forward, noting that the House and Senate will 'figure out a landing spot.' But moderate Republicans from high-tax blue states — including New York, New Jersey and California — are showing no interest in more talks and instead want the Senate to stick with their deal. The group is warning that they will vote against a bill that contains a $10,000 deduction cap — enough opposition to sink the entire package full of President Trump's legislative priorities. 'Restoring SALT is not about New Jersey alone. It is about fixing a flaw in the federal tax code that stifles growth, undermines local control, and violates the conservative belief in fair, limited taxation. $40k is the right compromise,' Kean Jr. wrote on X this week in response to the Senate's proposal. 'No SALT, no deal.' The current dynamics do not come as a surprise. House Republicans in the SALT Caucus for years have pushed to increase the $10,000 deduction cap in current law, decrying the 2017 Tax Cuts and Jobs Act for implementing the limit in the first place. They saw deliberations over the 'big, beautiful bill' as their time to deliver for their constituents, and negotiated the $40,000 deduction cap for individuals making $500,000 or less. But with no Senate Republicans from high-tax blue states, SALT does not have a champion in the upper chamber — and Senate Republicans, as a result, are trying to change the costly provision. 'There's not one Republican in the United States Senate who gives a s— about SALT,' a former House member, said last month. 'Having said that, what does matter is 218 votes in the House, and we want to be cognizant about that.' The deadlock, however, is dragging on into dangerous territory for Republican leaders on Capitol Hill: Top lawmakers are under heavy pressure to enact the 'big, beautiful bill' by July 4, a deadline the administration has gotten behind. White House chief of staff Susie Wiles told Senate Republicans during their weekly lunch this week that the president wants the megabill on his desk by Independence Day. Despite that due date, SALT Republicans are showing no signs of relenting on their demand for the House deal. In fact, the calendar is on their side: If the 2017 Trump tax cuts expire without a deal on SALT, the deduction cap snaps back to being unlimited — a reality they would be elated with. 'The Senate's choice is simple,' LaLota said. '[A]dopt the House's $40,000 SALT compromise—or risk blowing up the [One Big, Beautiful Bill Act], letting SALT go back to unlimited, and watching the Trump tax cuts expire.' Lawler echoed that sentiment, arguing that the House deal is the only agreement that will land the SALT Caucus's support. 'By agreeing to a cap we are providing our colleagues the ability to pay for other provisions including the doubling of the standard deduction, the no tax on tips, no tax on overtime, the enhanced child tax credit. So this is the deal,' he said. 'This is what was agreed upon.' Al Weaver contributed.
Miami Herald
a day ago
- Business
- Miami Herald
Social Security could run out sooner than you think
When Social Security was first signed into law by President Franklin D. Roosevelt in August 1935, it created a crucial lifeline for Americans as they navigated their golden years. Roosevelt was passionate about the law, saying after signing it, "We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age." Don't miss the move: Subscribe to TheStreet's free daily newsletter The creation of the law changed the lives of Americans for the better, and ever since then, many have relied on Social Security as a supplement for retirement - or, in some cases, their sole income after retirement. Related: Senate proposes big change to Social Security, SALT income tax deduction This year alone, 70 million people will receive Social Security, according to a statement from Social Security Administration Commissioner Frank Bisignano. However, in recent years, concerns about the program's future started to bubble up. While it was designed to be sufficient to pay benefits through the year 2057, the 1983 Trustees Report pointed out a grim fact: the cost of the program would rise above the annual tax income of the program well before 2057. Now a new report has come out with updated information about when Social Security will run out - and it's deeply concerning. The annual report from the Social Security Board of trustees was released on June 18 and reports that the trust fund Social Security leans on to pay retirement benefits could be depleted by 2033, which is the same thing it predicted last year. After that point, 77% of benefits would be payable. More Social Security: Jean Chatzky sends strong message on 401(k)s, Social SecurityDave Ramsey's blunt advice regarding Social Security and 401(k)sSuze Orman addresses growing Social Security problem However, there is one key change in the report. The combined trust funds, which are made up of the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund, are said to have enough resources to pay out benefits until 2034. Last year, the annual report said the funds would last until 2035. After that point, 81% of the combined benefits will be payable, per the report's new findings. All this can change depending on decisions made by lawmakers - and one expert believes that this news could offer a much-needed push. "Given Social Security's critical importance to millions of retirees and the availability of simple solutions, benefit cuts still seem unlikely," said Jean-Luc Bourdon, CPA and founder of Lucent Wealth Planning. "What's missing is political will. Politicians often require a sense of crisis to tackle fiscal challenges, so the projection that the trust fund shortfall will happen a year earlier than anticipated could finally bring them closer to fixing the problem. Ironically, the worse the news is for the trust fund, the closer the solution might be." On Facebook, CEO of HLS Retirement Consulting Heather Schreiber also shared her thoughts on the new information, stressing that those in her field communicate the brutal truth to their clients. "The most significant contributor to the worsening of the actuarial balance was the passage of the Social Security Fairness Act (#SSFA), which increased benefits for individuals receiving pensions based on work not covered by Social Security," she wrote. "In a press release today, SSA Commissioner Frank Bisignano reaffirmed the financial status of the trust funds as a top priority of the current administration. Sidebar: If lawmakers continue to kick this can down the road and cuts come to fruition, no one is immune to the haircut. So, if your clients think that claiming early to grandfather themselves into a protected class is the answer, please educate them!" Related: Dave Ramsey warns Americans on Social Security The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
2 days ago
- Business
- Yahoo
Trump Urges SALT Deal as Lawler Stands Firm on $40,000 Cap
(Bloomberg) — President Donald Trump expressed optimism that lawmakers could reach a compromise on the state and local tax deduction — a sticking point in his 'One Big Beautiful Bill' — even as a key SALT advocate insisted a deal had already been reached. Security Concerns Hit Some of the World's 'Most Livable Cities' JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads How E-Scooters Conquered (Most of) Europe Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown Trump said Wednesday that resolving the contentious debate over the SALT cap is imperative to passing his multitrillion dollar tax bill. 'It's very difficult, and I understand both sides, but we'll just have to see, hopefully a compromise or something's going to be made,' Trump told reporters at the White House. New York Representative Mike Lawler — one of the House's most vocal supporters of the SALT deduction — said earlier Wednesday he is open to negotiating with the Senate to advance the tax bill, but insisted he would not agree to lower the $40,000 SALT cap deal reached in the House. 'We negotiated,' Lawler said Wednesday in an interview with Fox Business of the House version of the bill. 'That's the deal.' The SALT deduction has been a primary sticking point holding up Trump's legislative agenda. Lawler, one of a handful of Republicans representing districts in high tax states, previously called the Senate version of the tax bill 'dead on arrival' because of its $10,000 cap on SALT. Senate leaders have characterized that figure as a placeholder while negotiations have continued, but have also said there is no desire among Republicans in their chamber to keep the cap at $40,000. GOP Senators are considering a $30,000 cap on SALT as a compromise between the $10,000 currently allowed and the more generous limit in the House tax bill. White House Chief of Staff Susie Wiles is scheduled to meet with Senate Republicans on Wednesday to discuss the tax bill, according to a person familiar with the planning. Vice President JD Vance met with senators on Tuesday to urge them to support the legislation. The House and Senate have to agree on a plan before it can go to Trump's desk to become law, giving Lawler and his SALT-focused colleagues leverage to demand their concerns be addressed. Trump warned that making SALT a 'red line' would mean a tax increase. The bill renews many of his first-term tax cuts on households and small businesses, which are set to expire at the end of the year. Instead of agreeing that the SALT cap could be lowered, Lawler listed off costly items in the bill, including the child tax credit and cutting taxes on tips and overtime, that could be negotiated. 'We're not giving you the full boat,' Lawler said. 'I have negotiated in good faith from day one, and I am still willing to work with my colleagues to get this done, but we are not going to be fleeced in New York.' There are other variables that could be negotiated besides the cap amount, including length of time it is in place and the phase out for higher income taxpayers. Senate Democratic Leader Chuck Schumer criticized Republican colleagues in the chamber for seeking to minimize the SALT deduction, calling that move a 'a dagger aimed at the heart of blue states.' —With assistance from Erik Wasson and Cam Kettles. (Adds Wiles plan to meet with senators on Wednesday) Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software ©2025 Bloomberg L.P. Sign in to access your portfolio
