GOP Tax Bill Could Pass House By July 4: Rep. Jason Smith

The chairman of the House tax committee warned lawmakers from high-tax states demanding relief from a $10,000 cap on the state and local deduction that they will have to settle for an “unhappy” compromise.

House Ways and Means Committee Chairman Jason Smith said Tuesday in a Bloomberg Television interview that he will strike a balance between those who want no limit on the SALT deduction and those who want no write-off at all.

“The number we’ll find will probably make everyone unhappy,” Smith, a Missouri Republican, said. “And so that means it’s probably the right number.”

Smith said there will be an increase from the current $10,000 cap in the bill. While he did not reveal his preferred solution, lawmakers have been discussing at least doubling the cap for joint filers and indexing it to inflation.

Lawmakers from high-tax states including New York, New Jersey and California are fighting for much bigger increases including $40,000 for individuals and $80,000 for joint filers.

Such a change could cost more than $800 billion over ten years however, limiting the ability of Congress to pass other tax priorities, such as eliminating taxes on overtime and tips.

Watch Rep. Jason Smith, who leads the tax-writing House Ways and Means Committee, speaking with Bloomberg Dallas bureau chief Julie Fine.

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