Senate Republican Leader Thune: Nobody will get everything they want on the SALT deal.

Senate Republican Leader Thune: Nobody will get everything they want on the SALT deal.

Senate Republicans have proposed a $40,000 cap on state and local tax (SALT) deductions, a significant concession to House Republicans from high-tax swing districts. The proposal, which aims to resolve a long-standing standoff over the SALT provision, includes a lower income threshold than the current $10,000 cap favored by Senate GOP leaders [1].

Key negotiator Senator Markwayne Mullin of Oklahoma plans to present the offer to House Republicans from New York, New Jersey, and California. The proposal would phase down the SALT deduction for incomes over $500,000 in 2025, with the income limit increasing by 1% per year. However, Mullin did not specify the exact income threshold in his proposal [1].

The SALT provision has been a major point of contention in the Senate, with some Republicans favoring a lower cap and others advocating for a higher threshold. The House bill, which passed with a single vote last month, proposed a $40,000 cap. New York Republican Nick LaLota has signaled openness to adjusting the income threshold but remains steadfast on the $40,000 cap [1].

The proposed SALT cap deal aims to reduce the chances of further changes to the tax bill once it is sent back to the House from the Senate. Any modifications would delay the legislation, requiring the Senate to take up the measure again, including procedural steps [1].

Senate Republican Leader John Thune is also navigating competing demands from conservatives and moderates on social safety net cuts and the elimination of clean energy tax credits. The resolution of these disputes is crucial for Thune to secure the necessary votes to pass the legislation [1].

Additionally, Senate Republicans are addressing Medicaid cuts to rural hospitals, with Senator Josh Hawley of Missouri and Senator Jerry Moran of Kansas expressing concerns over the lack of detail and size of the emergency fund proposed for hospitals [1].

The SALT deal, if agreed upon, would be a significant step forward in the Senate's effort to pass President Donald Trump's massive tax package before the July 4 holiday. However, Thune has warned that "nobody will get everything they want" on the SALT deal, indicating that further compromises may be necessary [1].

References:
[1] https://www.bloomberg.com/news/articles/2025-06-23/senate-gop-to-offer-40-000-salt-cap-with-lower-income-threshold