N.Y. Republicans get their shot at tax-deduction bill after minor rebellion against Speaker Johnson

New York Republicans scored a victory on Thursday when a House panel advanced a bill that would allow some married couples to deduct more of last year’s state and local taxes, but only after the lawmakers staged a minor rebellion against Speaker Mike Johnson. 

The House Rules Committee teed up the legislation, sponsored by Rep. Mike Lawler, New York Republican, for a future House vote during a last-minute emergency hearing, which was the result of an agreement among Mr. Johnson and the four New York rebels. 

But Mr. Johnson, Louisiana Republican, has given no indication when the House might vote on the bill.

The blue-state Republicans briefly blocked legislation unrelated to a $78 billion tax cut deal because the bipartisan package did not include an increase in the federal deduction for the state and local taxes, or SALT. 

House Ways and Means Committee Chair Jason Smith, Missouri Republican, told The Washington Times that SALT fixes were not included in the tax deal, which passed the House on a landslide bipartisan vote Wednesday, because it was a contentious issue. 

Mr. Smith scoffed when pressed on whether he opted not to include the SALT provision in favor of including more bipartisan elements to get the bill across the finish line. 

“That’s a mischaracterization,” Mr. Smith said. “SALT was just more contentious than the items that were in the bill that was passed.”

Mr. Lawler and other New Yorkers wanted to nix the so-called “marriage penalty” by raising SALT deductions for married couples from $10,000 to $20,000. 

His bill, which passed the GOP-led panel 8 to 5, achieves that and sets an income cap of $500,000 for married couples who want to use the tax provisions. However, it only applies to the 2023 tax year. 

Mr. Lawler faced pushback during the hearing from Democrats and Republicans on the panel, with some questioning whether the New Yorkers, who are in swing districts, were pushing so hard for SALT relief because of the upcoming election season. 

“SALT applies to everyone, not just New York,” Mr. Lawler said. “It applies to everyone, it is not just targeted to these blue states.”

Others were concerned about how the bill had been fast-tracked to the panel without first being considered in the House Ways and Means Committee nor given a Congressional Budget Office score on how much its implementation could cost. 

“I’m not sure here [is] the right approach, I do not believe this is regular order in any way shape or form, because I literally have no idea the impact of this legislation as I sit here and look at it because we didn’t do it through regular order, it didn’t go through committee,” said Rep. Chip Roy, Texas Republican and the lone conservative to vote against the bill.