Rep. Nicole Malliotakis challenged Democrats to help House Republicans increase the state and local tax deduction as she blamed them for overtaxing New York residents in the first place.
Malliotakis (R-NY), a member of the tax-writing House Committee on Ways and Means, was among the Republicans who huddled with President-elect Donald Trump Saturday in Mar-a-Lago to strategize on SALT and other issues.
“If Democrats care about middle-class families, then they should support it,” Malliotakis told The Post after that meeting. “The reason we need SALT relief is because our mayor and governor keep taxing New Yorkers to death.”
“The governor could easily lower income tax rates as the president did on the federal level. They choose to not do the right thing, and so we’re trying to provide relief from the federal level.”
Back in 2017, when Trump and Congress reformed the tax code via the Tax Cuts and Jobs Act, they opted to cap the SALT deduction at $10,000, which meant many blue state residents saw their federal income tax bills skyrocket.
Lawmakers in New York and other blue states formed the bipartisan SALT Caucus to lift the cap. Trump had previously signaled openness to that but doubled down on it during his meeting with lawmakers on Saturday.
New York Gov. Kathy Hochul (D) has repeatedly called for a “full repeal” of the SALT cap, but Malliotakis dismissed that as the governor trying to curry favor with donors.
“There’s not an appetite, whether it’s within Congress or among American taxpayers, to completely eliminate the cap. That would benefit the ultra-wealthy, and we’re really focused on middle-class families,” Malliotakis said.
Lawmakers are loosely mulling an increase of the cap to $20,000 on the low end and $100,000 on the high end for individuals, she added. Malliotakis also wants the final number to be indexed for inflation.
“We didn’t discuss specifics. That’s part of our homework,” Malliotakis said of the plan.
Complicating the situation is the hard-right flank of the House Republican Conference, which isn’t particularly eager to aid blue states and is also wary about the potential impact on the deficit. Republicans also have a threadbare majority in the lower chamber.
To make it more palatable, Malliotakis has floated the idea of tightening the parameters of the SALT deduction, including by limiting the “property tax portion to primary residences.”
Potential offsets discussed during the Mar-a-Lago meeting included tariffs, reforming corporate SALT rules, reevaluating refundable tax credits and rolling back regulations broadly, according to Malliotakis.
Many House Democrats, including from New York and New Jersey, are rooting for their GOP counterparts to prevail. Back in the early days of the Biden administration, they had lobbied for SALT reform in the Democrats’ Build Back Better package, but that ultimately got cut in the final version, which was rebranded the Inflation Reduction Act.
Thus far, no Democrat has committed to backing the tax reform package, which would be paired with an extension of the relief in the Tax Cuts and Jobs Act as well as Trump’s push for eliminating or at least paring back taxes on tips, Social Security and overtime work.
At least one Democrat, Rep. Pat Ryan (D-NY), has pleaded with Trump to include Democrats in discussions and had asked to be included in the Mar-a-Lago meeting on Saturday.
Trump has also pushed to couple tax reform with other agenda items on the border and energy that he’s been eyeing. Senate Republicans almost universally prefer two bills.
“I think the two bills run the risk of the tax cuts expiring altogether,” she said, emphasizing the difficulty of getting the fractious House GOP Conference on board with the legislation.
During the meeting between Republican members of the House SALT Caucus and Trump, they discussed other issues such as the need for a border security overhaul package and their desire to end the congestion tax in the lower half of Manhattan.
Malliotakis and other attendees have previously expressed hope that the Federal Highway Administration under the Trump administration could help scrap that tax, which began on Jan. 3.
