A bipartisan priority for New Yorkers in Congress — increasing the federal deduction for state and local tax payments, or SALT — has once again reached a dead-end on Capitol Hill. 

The latest effort was led by House Republicans from competitive districts in New York. Increasing the deduction would have given them a big victory on a pocketbook issue to campaign on this fall. 

The bill, which would have eliminated the so-called “marriage penalty” for a year, failed to advance on the House floor, was sunk by a procedural vote. The latest failure only underscores how it was a lot easier for Congress to limit a tax break that disproportionately benefits states like New York, than it has been to restore it. 

What You Need To Know

  • A SALT reform proposal sponsored by Republicans representing New York's competitive congressional districts was blocked on the House floor last week. It would have addressed the SALT "marriage penalty"

  • The N.Y. Republicans previously threatened to block a key procedural vote, as they demanded that SALT reforms be included in a larger bipartisan tax package. They ultimately backed down, agreeing to continue talks with House leaders. The SALT changes were never added to the tax package

  • The N.Y. Republicans blame Democrats for not joining them to advance their standalone SALT bill. Democrats said the blame is misplaced
  • The cap on the state and local tax deduction (SALT), which was enacted as part of Trump's 2017 tax overhaul, disproportionately hurts taxpayers in blue states like New York, where property and state income taxes are relatively high

“Obviously we're disappointed and we're frustrated,” said Nassau County Rep. Anthony D’Esposito, one of the proponents of the recent reform push. 

The issue dates to the 2017 tax cut then-President Donald Trump pushed through Congress. To help pay for it, his plan placed a $10,000 cap on the federal deduction for state and local taxes. 

The cap overwhelmingly hurts taxpayers in blue states like New York, where property and state income taxes are relatively high. 

In their recent run at SALT reform, New York’s swing district Republicans even threatened to block a key procedural vote on the House floor, which would have ground legislative action there to a halt. Their demand: SALT reform should be added to a bipartisan tax package.

Tanking a procedural vote, known as a “rule,” is a maneuver that hard-right House Republicans have used several times over the past year, says Casey Burgat, director of the legislative affairs program at The George Washington University. Among other things, conservatives held up action on a defense spending bill — twice. 

“They can really withhold pieces of legislation from even getting considered, which makes you influential in at least starting conversations or gaining concessions on something that you also care about,” Burgat said. 

In the tightly divided House, New York’s swing district Republicans had the numbers to apply leverage. 

However, they eventually backed off from their threat to sink the procedural vote, instead agreeing to continue conversations with House leaders about a path forward on SALT. 

Ultimately, SALT reform was not added to the bipartisan tax package. And the standalone SALT marriage penalty reform bill failed to advance. 

Asked if he and other swing district Republicans gave in too easily and too early, Suffolk County Congressman Nick LaLota pushed back. 

“In exchange for not killing a rule, the Speaker promised us an audience on the bill, not an outcome but an audience,” he said. “Threatening to take down a rule, I think, was a bridge quite very far for a couple of us practical, commonsense members to even get there.”

“I don't think we gave in too early,” D’Esposito said. “I think that we got the bill to a vote, we were able to talk and negotiate with leadership, which is what we did. I think this is the beginning of steps in progression.”

Burgat said he is surprised other groups of lawmakers have not adopted the hardline tactics of the conservative block. But such a strategy can come with a risk. 

“Moderates, just by their own definition, are less likely to push those advantages to kind of keep and maintain that semblance of agreement within the party,” Burgat said.

The New York Republicans blame Democrats for not joining them to advance the standalone SALT bill.

“Leader [Hakeem] Jeffries had the opportunity as a New Yorker — as a fellow New Yorker — to say, ‘You know what, we're going to put politics aside here. This is too important to my constituents, my state,’” Rep. Mike Lawler said. “He chose not to, so it's on him.”

Democrats say the blame is misplaced. 

They note such procedural votes traditionally fall on party lines, with the party in power voting ‘yes.’ However, in this case, 18 members of the Republican majority — some of them hardline conservatives — voted against moving ahead on SALT reform. 

Democrats also note that the Republicans attached a resolution denouncing the Biden administration’s energy policies to the SALT rule. In other words, casting a vote to advance SALT would likewise advance the bill that Democrats were not inclined to support. 

“They should be talking to their colleagues,” Rep. Gregory Meeks said of the New York Republicans. “They’re just trying to play politics with the issue so that they would have something to pull the wool over the eyes of the constituencies.”

Republicans are quick to point out that Democrats did not address the SALT cap when they controlled the House, Senate and White House last Congress. 

Democrats did include SALT reform in an early House-backed version of the Build Back Better bill. But those changes to SALT were ultimately not included in the final package that became law. 

What is next for SALT reform on Capitol Hill is uncertain.