SALT Cap Haunts GOP House Candidates as Democrats Turn Tables

Democrats running to unseat endangered blue-state Republicans get to campaign on an unusual message: The GOP is hiking your taxes.

The path to sustaining the House majority largely depends on whether Republicans can maintain their footholds in New York, New Jersey, and California, but those races may be tough if Republicans can’t raise the cap on the state-and-local tax deduction the GOP enacted in 2017.

That tax law instituted a $10,000 limit on the SALT deduction, drawing nay votes from a dozen House Republicans at the time, nearly all from high-tax states. The cap funded big tax cuts for individuals and corporations and the wider GOP generally backs it as a ding to higher-tax blue states.

But not all Republicans. Though many of the lawmakers voting against the 2017 tax bill to protest the limit are no longer in Washington, a new batch of blue-state Republicans are fighting to restore the deduction and keep their newly won seats. They’ve so far failed to convince their party to go along.

That’s giving Democrats the upper hand. Candidates in the toss-up districts already are hitting their opponents on the SALT issue, with many emphasizing that they’ll make eliminating the Trump-era cap a priority if elected. Even Republicans admit it may cost them.

“It’s going to make it tougher,” Rep. Mike Garcia (R-Calif.) said in an interview. “It would make it easier if we had a SALT victory.”

The winners of the 2024 elections will have a say in the 2025 battle over tax policy, when much of the 2017 tax law—including the SALT cap—expires. If Republicans lose their House majority, Democrats will let the $10,000 limit expire anyway, Garcia added.

Haunting Republicans

Zack Carroll, a partner at Liftoff Campaigns who’s assisting with a Democratic campaign in New Jersey’s 7th Congressional District, noted that Democrats got a boost from the SALT issue in 2018. Former GOP Reps. Dan Donovan and John Faso, who both voted against the 2017 tax law because of the cap, lost to Democrats a year later.

“In 2024, SALT will continue to haunt Republican incumbents, as charging Democrats as tax-raisers becomes increasingly difficult when the GOP’s brand in a lot of these states is linked to eliminating SALT,” Carroll said.

Garcia, along with New Jersey Rep. Tom Kean Jr. and New York Reps. Anthony D’Esposito, Mike Lawler, and Marc Molinaro represent districts rated as toss-ups by the nonpartisan Cook Political Report. California Reps. Michelle Steel and Young Kim as well as New York Rep. Nick LaLota are also in competitive races.

Those Republican members also have been pushing their party to get on board with proposals to raise or get rid of the SALT cap. They have stalled the House GOP from passing a tax bill, refusing to vote for the package unless the Ways and Means Committee adds a provision addressing the limit.

The latest Democrat to jump into the race has also been a major advocate for modifying the cap. Former Rep. Tom Suozzi (D-N.Y.), a Ways and Means member who left Congress to primary New York Gov. Kathy Hochul (D), recently announced he’s running for embattled Rep. George Santos’ (R-N.Y.) seat. The House in 2019 passed Suozzi’s legislation that would have increased the limit for taxpayers filing a joint return with under $100 million in income.

Sue Altman, a former teacher and the executive director of the New Jersey Working Families Alliance running as a Democrat against Kean, called the GOP’s efforts to raise the cap “half-hearted.” Altman said if elected, she would press for lawmakers to eliminate the $10,000 limit.

“I don’t see any real, full effort,” Altman said. “Republicans could do this. It sits within their caucus to make this happen and they haven’t brought that forward yet.”

The Pitch

Some candidates like Liz Whitmer Gereghty, Michigan Gov. Gretchen Whitmer’s (D) sister who’s looking to unseat Lawler in New York, has called the 2017 tax law a “weaponization of the tax code” against Democratic states. Jim Gaughran, running to defeat LaLota, noted that Republicans put the cap in place, adding “there’s been promises to eliminate it, but nothing happens.”

Others, like Joe Signorello, a former mayor who dropped out of the race last week, said while tax policy won’t be the forefront of his campaign against Kean, eliminating the cap is necessary for providing tax relief for his district.

Democrats, too, though failed to get rid of the limit in the Democrats’ Build Back Better legislation proposed by President Joe Biden in his first year as president. The effort was defeated by progressives who oppose the deduction, saying it’s a giveaway to the wealthy. Signorello said he sees that eliminating the cap does boost certain income brackets.

“But that doesn’t mean you throw out the baby with the bathwater,” Signorello said. “The hard reality is we are suffering here in New Jersey, and it is something that we need to see relief for, immediately.”