Key tax deduction

Mullin outlines possible agreement on key tax deduction

But it was quickly rejected by a blue-state Republican.

Benjamin Guggenheim

Sen. Markwayne Mullin (R-Okla.) indicated Monday evening that he’s closing in on an agreement to increase a key tax deduction sought by blue-state House Republicans.

However, Mullin’s comments were quickly followed by a retort by Rep. Nick LaLota (R-N.Y.), who said that Mullin’s idea for a compromise would not be accepted in the House.

“I don’t want to release a number just yet, but I think we got our numbers now. I wouldn’t say an agreement, just an acceptance,” Mullin told reporters on Monday evening, referring to negotiations over an increase to the $10,000 state and local tax deduction. “I think we’ve got an option that, like I said, neither side is going to love, but it’s going to be something that we’re all going to have to deal with.”

Mullin has been the lead Senate Republican negotiating with a group of blue-state Republicans who have been pushing to increase the SALT cap. Senate Republicans hate the deduction and believe it’s an unfair subsidy to high-tax blue states. But New York, New Jersey and California Republicans have long said they won’t vote for the GOP megabill without a SALT increase.

It’s one of the most contentious issues left holding up the passage of the Republicans’ sweeping border, energy and tax package.

Mullin said that the possible agreement involved keeping the new $40,000 cap contained in the House-passed legislation, but lowering the new $500,000 income limitation on the higher deduction. That proposal, which costs more than $300 billion, was settled on after arduous, monthslong negotiations between House GOP leadership and the blue state Republicans.

However, the group already pushed back on that idea, including during a call they had with Mullin last week.

Indeed, a little more than twenty minutes later after Mullin’s comments, LaLota said on X that any lowering of the income cap on SALT would necessitate a concession by Senate Republicans in return.

“I’ve heard what some Senators want the House to give up, particularly on the SALT income cap, but I’ve yet to hear what they are offering in return,” LaLota said. “A one-sided proposal like that is not a compromise. It is dead on arrival.”

Senate Republicans hope to put President Donald Trump’s “big, beautiful bill” on the floor as soon as Wednesday, though Thursday is looking more likely. Mullin added on Monday that “there’s not consensus on our side,” referring to fellow Senate Republicans, on how much to increase the SALT deduction.