How Two NY Republicans Quadrupled the SALT Cap Amid Trump’s Twist and 2026 Governor Race

SALT Shake-Up: How Two Rising GOP Stars Negotiated a Major Tax Win Amid Trump’s Mixed Signals

When it comes to state and local tax deductions, the name “SALT” carries a lot of weight — especially for taxpayers in high-tax states like New York. At the center of the latest tug-of-war over the contentious $10,000 cap on SALT deductions are two up-and-coming Republican politicians from New York: Reps. Elise Stefanik and Mike Lawler. Both eyeing the governor’s mansion in 2026, these lawmakers have recently played a leading role in negotiating a provision that would quadruple the cap — a move that’s shaking up the political landscape and putting them at odds with former President Donald Trump.

The SALT Cap: A Flashpoint in American Tax Policy

First, a quick refresher: The SALT cap was introduced as part of Trump’s 2017 Tax Cuts and Jobs Act, limiting how much taxpayers can deduct from state and local taxes to $10,000. This hit high-tax states particularly hard, triggering a long-standing outcry from residents and officials in places like New York, California, and New Jersey.

The debate? Whether to repeal or significantly raise this cap. Advocates argue the cap unfairly penalizes states with higher taxes — states that often invest heavily in public services. Opponents say lifting the cap disproportionately benefits wealthy taxpayers in those states.

Stefanik and Lawler: Champions of SALT Relief

Enter Stefanik and Lawler. Both Republicans from New York, they have been vocal advocates for increasing, or outright repealing, the SALT deduction cap.

• Elise Stefanik: Known as a close Trump ally, Stefanik has doubled down on pushing tax relief for her constituents. Even though Trump withdrew her nomination for U.N. ambassador in a move to preserve the House Republican majority, she’s stayed loyal, meeting with him recently at the White House to hammer out the SALT deal.

• Mike Lawler: A persistent fighter for SALT repeal, Lawler introduced legislation earlier this year aiming to raise the SALT cap to $100,000 for individuals and $200,000 for married couples — a far bolder proposal than what his party eventually agreed upon.

Together, Stefanik and Lawler teamed up with fellow New York Republicans Andrew Garbarino and Nick LaLota to push back against what they called “insulting” proposals to raise the cap to just $30,000 — far below what they considered fair for their districts.

The Big Twist: Trump’s Changing Tune

Here’s where the drama heats up. Although Trump originally backed raising the SALT cap — and even pledged during a rally last year to “get SALT back” — he recently flipped his position. During a closed-door meeting with House Republicans, Trump ordered them to stop pushing the SALT increase. He argued that raising the cap would politically benefit Democratic governors in states like New York and California, whom he views as rivals.

Reportedly, Trump told Lawler, “If you lose because of SALT, you were going to lose anyway.” That blunt remark underscored the tension between Trump’s national strategy and the regional priorities of New York Republicans.

Different Paths, Same Goal: How Stefanik and Lawler Responded

Following Trump’s pivot, Stefanik and Lawler took very different approaches:

• Stefanik stuck close to the president, attending the White House meeting and keeping her position aligned with Trump’s directive. Notably, she declined to join a joint statement issued by other SALT caucus members, including Lawler, which insisted that raising the SALT deduction was a matter of “fundamental fairness” for Trump voters.

• Lawler, on the other hand, took a firmer stand on behalf of his district. On social media (X), he emphasized that while he respected Trump, he wouldn’t support legislation that harms his constituents. He reminded followers that SALT relief was a key reason he won his seat and helped maintain the Republican majority in the House.

The Outcome: A Quadrupled SALT Cap

Despite the back-and-forth, the two lawmakers helped negotiate a provision to raise the SALT cap from $10,000 to $40,000 — a fourfold increase. This significant change passed narrowly in the House spending bill by a margin of just one vote (215-214). Stefanik proudly claimed she was the “deciding vote” that tipped the balance in favor of the bill, while Lawler called it a proud achievement.

• The bill’s passage came without any New York Republicans voting against it.

• Both Stefanik and Lawler seized the opportunity to blame New York Governor Kathy Hochul for high state taxes and spending, framing themselves as champions fighting back against “far-left tax-and-spend Democrat policies.”

Governor Hochul Pushes Back Hard

Governor Hochul didn’t hold back her criticism. She accused the Republican delegation of betraying their constituents by “caving to the billionaire class” and criticized the budget’s cuts to SNAP benefits, affordable housing, clean energy projects, and Medicaid funding — all while failing to fully repeal the SALT cap.

Her statement underscored the deep partisan divide on tax policy and highlighted the political stakes for both sides as the 2026 gubernatorial race looms.

What This Means Going Forward: Key Takeaways

• For New York Taxpayers: This raise in the SALT cap could mean substantial tax relief for middle- and upper-middle-class families, but it’s still far from a full repeal. Those paying the highest state taxes may see relief, but many advocates argue it’s just a step in the right direction.

• For the 2026 Gubernatorial Race: Stefanik and Lawler have positioned themselves as tax reform champions willing to take on their own party’s leadership and even the former president to stand up for New Yorkers. Meanwhile, Hochul portrays herself as a defender of progressive policies and social programs.

• For the GOP: The internal conflict between Trump’s national strategy and the priorities of local representatives like Stefanik and Lawler reveals ongoing fractures within the party, especially on issues that have regional impact.

Exciting Highlights and Points to Watch:

• Stefanik’s balancing act: Remaining loyal to Trump while championing a popular tax relief measure.

• Lawler’s bold advocacy: Introducing legislation for a full repeal and publicly pushing back against the president.

• Narrow House vote: A razor-thin margin that reflects the deep divisions over SALT.

• Hochul’s counterattack: Using the budget bill’s social cuts as political ammo against Republicans.

• The 2026 governor’s race: How SALT and tax policies may become central campaign issues.

Final Thoughts

The SALT debate is far from over. While a fourfold increase in the deduction cap marks a major development, it highlights the complicated interplay between national politics and local priorities. Stefanik and Lawler’s roles illustrate the challenges that rising GOP leaders face as they try to appeal to their voters, manage party loyalty, and set the stage for future political ambitions.

In the end, this is more than just a tax policy dispute. It’s a glimpse into the evolving political chessboard ahead of the next big election — and one that could reshape how states with high taxes are treated in federal policy.