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US: HFC Floats Corporation Tax Hike To Resolve Standoff Over SALT

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The conservative House Freedom Caucus has proposed a corporate tax hike to offset the cost of raising the cap on State and Local Tax deductions (SALT) - a singular political priority for a handful of blue-state Republicans, and one of the most challenging issues to resolve in reconciliation budget talks. House Speaker Mike Johnson (R-LA) is eyeing an April floor vote for a huge energy, tax, border security reconciliation bill but is hamstrung by the spending priorities of HFC and SALT Republicans, both of whom can sink legislation.

  • Politico: “Under the proposal, blue-state Republicans would have to agree to restrict the SALT deduction for corporations in exchange for easing a cap on the deduction for individuals and families."
  • Freedom Caucus Chair Andy Harris (R-MD) said in an interview: “I think a lot of us in the Freedom Caucus think that … if they came to that kind of compromise where increasing individual [SALT] deductions was paid for by corporate SALT, then we’d probably be all right with that. Obviously, in the current fiscal situation, we can’t be giving away money.”
  • Roll Call noted this week: "House Republicans seeking SALT relief hold differing views on where to set the cap, but a limit between roughly $20,000 and $60,000 seems to be the range under consideration."
  • The Bipartisan Policy Center notes, removing the SALT deduction for corporate income taxes would raise roughly USD$190 billion over 10 years, dropping to roughly USD$134 billion when corresponding economic effects are considered.
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The conservative House Freedom Caucus has proposed a corporate tax hike to offset the cost of raising the cap on State and Local Tax deductions (SALT) - a singular political priority for a handful of blue-state Republicans, and one of the most challenging issues to resolve in reconciliation budget talks. House Speaker Mike Johnson (R-LA) is eyeing an April floor vote for a huge energy, tax, border security reconciliation bill but is hamstrung by the spending priorities of HFC and SALT Republicans, both of whom can sink legislation.

  • Politico: “Under the proposal, blue-state Republicans would have to agree to restrict the SALT deduction for corporations in exchange for easing a cap on the deduction for individuals and families."
  • Freedom Caucus Chair Andy Harris (R-MD) said in an interview: “I think a lot of us in the Freedom Caucus think that … if they came to that kind of compromise where increasing individual [SALT] deductions was paid for by corporate SALT, then we’d probably be all right with that. Obviously, in the current fiscal situation, we can’t be giving away money.”
  • Roll Call noted this week: "House Republicans seeking SALT relief hold differing views on where to set the cap, but a limit between roughly $20,000 and $60,000 seems to be the range under consideration."
  • The Bipartisan Policy Center notes, removing the SALT deduction for corporate income taxes would raise roughly USD$190 billion over 10 years, dropping to roughly USD$134 billion when corresponding economic effects are considered.