Thune says no one will get everything they want in SALT deal.

Thune says no one will get everything they want in SALT deal.

June 19, 2025

Senate and House Republicans are making significant progress in their negotiations over the state and local tax (SALT) deduction, with a deal expected to be reached in the near future. According to sources, the current discussions are aimed at reconciling differences between the two chambers' versions of the tax bill.

Representatives from high-tax states, such as California and New York, have reported progress in their negotiations with Treasury Secretary Scott Bessent. The House bill proposes a $40,000 SALT deduction cap, which would gradually reduce the tax break for individuals earning more than $500,000 in 2025. The Senate version maintains the current $10,000 cap. Republican leaders hope to pass this version through the Senate by the weekend [1].

Senate Majority Leader John Thune has stated that no one will get everything they want in the SALT deal, indicating that compromises will be necessary to reach an agreement. This sentiment was echoed by Senator Markwayne Mullin, who suggested that the Senate could keep the $40,000 cap but change the income threshold. However, this combination was publicly rejected by the House's SALT Republicans days ago [2].

The negotiations are part of the broader effort to pass President Donald Trump’s multi-trillion dollar tax and spending legislation. The House bill narrowly passed by a single vote last month, and the Senate is working to align its version with the House-passed plan. The ongoing discussions highlight the complexity of reconciling the differing views of Republican lawmakers from various states.

As the negotiations continue, investors and financial professionals should closely monitor the progress of the SALT deal, as it could significantly impact the tax landscape and affect the financial markets. The final agreement will likely involve compromises that balance the interests of both high-tax and low-tax states.

References:
[1] https://www.investing.com/news/stock-market-news/house-republicans-closer-to-salt-deal-after-treasury-meeting-93CH-4111148
[2] https://www.politico.com/newsletters/inside-congress/2025/06/24/thunes-48-hour-megabill-scramble-00419986