Blue state Republicans threaten mutiny over state and local taxes in Trump's 'big, beautiful bill'

Republicans are divided over how to handle state and local tax deductions in the reconciliation process.

Rep. Mike Lawler, left, and other New York Republicans are pushing House Speaker Mike Johnson, right, for a higher SALT deduction cap in President Donald Trump's "big, beautiful bill." (Getty Images)

"We've negotiated in good faith on SALT from the start— fighting for the taxpayers we represent in New York. Yet with no notice or agreement, the Speaker and the House Ways and Means Committee unilaterally proposed a flat $30,000 SALT cap — an amount they already knew would fall short of earning our support," the statement said.

"It's not just insulting — it risks derailing President Trump's One Big Beautiful Bill. New Yorkers already send far more to Washington than we get back — unlike many so-called ‘low-tax’ states that depend heavily on federal largesse. A higher SALT cap isn't a luxury. It's a matter of fairness. We reject this offer."

The statement was signed by Reps. Mike Lawler, R-N.Y., Nick LaLota, R-N.Y., Elise Stefanik, R-N.Y., and Andrew Garbarino, R-N.Y.

However, not all of their delegation is on board.

Rep. Nicole Malliotakis, R-N.Y., whose district spans a sliver of south Brooklyn and all of Staten Island, told Fox News Digital first that she could support a $30,000 cap.

"Everyone needs to advocate for the needs of their district. Tripling the deduction to $30,000 will provide much-needed relief for the middle-class and cover 98% of the families in my district," she said.

However, a spokesperson for Johnson pointed out that there was no commitment made on any number.

Press secretary Athina Lawson wrote on X alongside a report that Johnson "acknowledged" the $30,000 number, "To add vital, missing context: What the Speaker actually said is this is one number among others in ongoing discussions amongst members."

House Ways & Means Committee Chairman Jason Smith's panel is tasked with the taxwriting portion of the bill. (Tom Williams)

They are also the most vulnerable lawmakers in the House GOP Conference, and their seats are key to Republicans holding onto their slim majority.

Republicans in favor of raising the SALT deduction have also pointed out that while it benefits people in high-cost-of-living areas outside big cities, it is those states that send more tax dollars back to Washington for programs that ultimately benefit the entire country.

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However, others in conservative circles have pushed back on their efforts.

"The Republican margin is so small in the House that a handful of New England Republicans have a lot of sway over this bill and are pushing to raise that deduction," said Marc Short, an alumnus of Trump's first administration who played a key role in the 2017 tax negotiations.

"I think from a tax perspective, what's unfair about that is you're basically taking much of middle America that live in states that are better governed and asking them to subsidize the residents in states that are poorly managed and continue to generate huge deficits."

Elizabeth Elkind is a politics reporter for Fox News Digital leading coverage of the House of Representatives. Previous digital bylines seen at Daily Mail and CBS News.

Follow on Twitter at @liz_elkind and send tips to elizabeth.elkind@fox.com

https://www.foxnews.com/politics/blue-state-republicans-threaten-mutiny-over-state-local-taxes-trumps-big-beautiful-bill