The expansion of the cap on state and local tax deductions negotiated by blue-state Republicans and included in the megabill that passed the House last week would add $130 billion more to the deficit, according to a new official analysis.
The Joint Committee on Taxation, Congress’s in-house tax scorekeeper, on Wednesday released a full score of the version of the Republican legislation, the One Big Beautiful Bill Act, meant to enact President Donald Trump’s domestic agenda.
The changes to the cap on state and local tax deductions were perhaps the most notable difference between the version of the bill that passed the Ways and Means Committee and the final text that the House passed after intense negotiation among GOP members.
The legislation permanently extends the 2017 Trump individual tax cuts while increasing spending on the border and cutting spending on some entitlement programs.
The $10,000 cap on SALT deductions was implemented as a revenue-raising measure in the 2017 overhaul. The legislation passed last week would lift the cap to $40,000 for married couples, with a $500,000 income limitation. Lawmakers from high-tax states, such as Reps. Mike Lawler (R-NY) and Nick LaLota (R-NY), rebuffed the Ways and Means Committee’s initial offer of $30,000, which passed out of the committee.
The SALT cap approved by the Ways and Means Committee would have raised $915.6 billion in revenues over a decade. The version passed by the full House would raise only $786.8 billion.
In total, the latest JCT numbers show that the tax portion of the reconciliation bill that House Republicans passed would cost the Treasury Department some $3.9 trillion over the next decade.
Another change made to the final version of the bill is that it includes deeper cuts to clean energy tax credits. Some fiscal hawks had pushed House Speaker Mike Johnson (R-LA) to cut spending more in exchange for their votes.
GOP TAX BILL WILL CLEAR SENATE 95% INTACT, HOUSE CHAIRMAN PREDICTS
The version of the bill passed by the full House contains about $11.5 billion more in cuts to clean energy tax credits than the version that initially passed the Ways and Means Committee. That was from deeper cuts to “tech-neutral” clean energy investment and production credits, but fewer cuts to nuclear credits.
The JCT has yet to score the entirety of the combined reconciliation legislation, which contains cuts to things such as Medicaid spending over time and billions of dollars directed to immigration authorities and border security.
