The agreement marks a big win for SALT cap crusaders like Rep. Mike Lawler (R-NY) and others who have demanded the SALT cap be lifted as part of reconciliation.

The emerging agreement would set the cap on the state and local tax deduction, or SALT, at $40,000. That is up from $10,000 this year and up from $30,000 in the current version of the Republican fiscal bill that is headed for a House vote as soon as Wednesday.

Speaker Mike Johnson (R-La.) and moderate Republicans have zeroed in on an agreement for the state and local tax (SALT) deduction cap, three sources told The Hill, solving a critical hang-up that

New York Republicans find themselves in the middle of the fight over the deductibility of state and local taxes in the federal tax bill.

Few states have more riding on the future of the SALT deduction than New York. With some of the highest property taxes in the country and a high-income tax rate layered on top, New York residents are disproportionately affected by the current $10,000 cap on state and local tax deductions.

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Breaking that out more, 20% of taxpayers in California’s 40th Congressional District — represented by Kim, it covers eastern Orange County and parts of Riverside and San Bernardino counties — claimed SALT deductions in 2017; only 7.5% did in 2022, according to data from the National Association of Realtors.

President Donald Trump dimmed the hopes of some Republicans Tuesday when he took a public swipe at their efforts to raise the cap on state and local tax deductions, warning that doing so would “benefit Democrat governors” who he says “are destroying our country.