Mike Lawler loses bid for vote on his SALT tax reduction reform bill for married couples

Rep. Mike Lawler insists that the cap on the deductibility of state and local taxes is the biggest issue facing constituents in the 17th Congressional District.

Lawler, R-Pearl River, finally got action Wednesday on his bill that would have eliminated the cap’s unfair treatment of married couples, who like single filers, have the deductibility of state and local taxes capped at $10,000 on their federal tax returns.

Lawler’s bill would have doubled the deduction for married couples, providing tax relief for families earning up to $500,000.

The result was not what he’d planned.

Lawler, who has emerged as a high-profile moderate in the GOP House majority, saw 18 of his fellow Republicans join forces with the unified Democratic caucus to defeat a procedural "rule" vote on Lawler’s SALT Marriage Penalty Elimination Act.

Defeat of the rule means the bill won’t come to the floor for a vote.

Lawler blamed the Democrats for failing to buck their party leadership and vote for the procedural “rule,” which typically are party-line votes and allow a bill to move to the floor.

“Rather than join me in bipartisan cooperation to deliver for all New Yorkers, Hakeem Jeffries and House Democrats from across New York chose to play politics and stop SALT relief dead in its tracks, while Governor Hochul, and senators Schumer and Gillibrand remained silent,” wrote Lawler on the social media platform, X. “They put partisan politics ahead of what is best for the people they represent and it’s shameful.”

Democrats reject resolution condemning Biden

Co-sponsored by Rep. Marc Molinaro, R-Dutchess, and Nick LaLota, R-Suffolk, the bill was viewed as an important measure for these first-term New York Republicans looking for a victory as they stand for re-election. The bill had a Democrat co-sponsor as well: Rep. Mikie Sherrill, D-New Jersey.

More: Lawler's last stand on SALT deduction reforms for married couples could come for vote

Sherrill, however, did not vote for the rule. She balked at the Republican House leadership’s decision to pair the SALT bill in the rule vote with another resolution that condemned President Biden’s energy policies.

That turned out to be a poison pill for Sherill and other Democrats intent on addressing the SALT cap, which has hit high tax Democrat-led states such as New York, New Jersey, and California.

There was no way Sherill — nor the rest of the unified Democratic caucus — would vote to condemn Biden’s energy policies.

Meanwhile, the band of 18 Republicans included high-profile members of the GOP’s Freedom Caucus – Matt Gaetz, R-Florida; Paul Gosar, R-Arizona; and Scott Perry, R-Pennsylvania – who have no interest in moving on SALT.

The cap is slated to expire at the end of 2025.

“Rep. Sherrill has been fighting to repeal Trump's SALT deduction cap since she was elected to Congress and House Democrats passed SALT relief twice while in the majority," said Sherill spokesman Sean Higgins. "It's a shame that Speaker Johnson set this legislation up to fail procedurally, all to protect Trump's tax increase on New Jerseyans.”

More: Mike Lawler wants to keep Social Security solvent, but won't say how he'll pay for it

Former Rep. Mondaire Jones, D-Sleepy Hollow, who is expected to face Lawler in November, noted that when he served from 2021 to 2023, he helped craft the Build Back Better legislation that passed the House, which would have increased the cap to $80,000.

The U.S. Senate never voted on the bill.

“It’s embarrassing that Mike Lawler can’t get the votes from his own party – who are in the majority because of him by the way – to get a vote on his own weak bill,” said Jones. “This should have been a simple procedural vote for his bill to even be considered.”

Ellie Dougherty, from the Democratic Congressional Campaign Committee, said the SALT vote highlights the inability of House Republicans to pass legislation.

“Mike Lawler’s been in Congress for 13 months and has delivered absolutely nothing on lifting the Trump-imposed SALT cap, which is a critical issue to families in New York’s 17th District," she said. "No matter how hard Lawler tries to absolve himself of responsibility, the reality is that his own Republican Party holds the majority and is fully responsible for the chaos and dysfunction in Congress that’s stood in the way of getting things done.”

House debated SALT before killing bill

Earlier in the day, representatives engaged in an hour-long debate on the issue, providing a glimpse into the yawning partisan divide in Washington, and the struggle New York Republicans face in undoing what House Republicans accomplished with the Trump-era Tax Cuts and Jobs Act of 2017.

The biggest beneficiaries of Lawler's bill would have been families earning between $231,000 and $500,000, who are taxed at 35% of their income over $231,000. An added $10,000 in deductibility would have been worth up to $3,500 to those filers.

A study by the Institute on Taxation and Economic Policy found that 96% of the tax savings under Lawler’s bill would flow to the top 20% of American taxpayers, with household incomes of at least $144,000.

“This represents a significant step towards alleviating the financial burden faced by countless families in my district and across the country, offering relief from the double taxation,” Lawler said. “It’s about fairness and supporting the backbone of our communities."

Lawler said that the bill’s hit to the U.S. Treasury — estimated at $8 billion — would be softened by the economic activity sparked by the tax break for families.

“Some critics might balk at the cost of this measure,” said Lawler. “The fact is that relief provided to families across the country would spur additional economic growth that would outpace the minor cost.”

Dems not looking to help with 'election year stunt'

House Democrats, however, were not in any mood to support the New York Republicans, whose elections in 2022 in Long Island and the Hudson Valley helped flip the House to the GOP.

Rep. Teresa Leger Fernandez, D-New Mexico, said the bill, which would have only impacted the SALT deduction cap for the 2023 tax year, was an election year stunt, designed to bolster the re-election campaigns of Blue state Republicans.

She reminded them that it was House Republicans who created the problem in 2017 with the Trump tax cuts. She reminded Lawler that in a recent Rules Committee meeting over the 2024 tax bill, there were amendments to increase the deduction for married couples to $30,000 and to cover both the 2023 and 2024 tax years. She said Republicans opposed those proposals.

“They created this problem that they now want to put a Band-aid on,” Fernandez said. “They capped the SALT deductions and their tax bill gave tax breaks to the wealthiest corporations and CEOs. As we know, Republicans and Trump seem to care more about the richest Americans.”

Fresh from former Rep. Tom Suozzi’s Tuesday victory in the special election to replace the expelled George Santos, Fernandez said that she was in no hurry to help New York Republicans in 2024. Democrats are looking to flip more of those Republican seats this fall.

“We constantly hear them want to make it permanent, that it’s one of the greatest things, except for when we need to have a couple of their members get re-elected,” she said. “We’re looking for a repeat of what we saw yesterday.”

But Rep. Marc Molinaro, R-Tivoli, said his upstate New York constituents who are married aren’t the super wealthy. They are homeowners struggling with the cost of middle-class life in New York.

“They struggle every day, and are barely getting by because they are slammed by property taxes and state taxes,” said Molinaro, the former Dutchess County executive who ran for governor against Andrew Cuomo in 2018. “They are not individuals who chose to be over-taxed. They were forced to by Democrats and one-party rule in the state of New York.”

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David McKay Wilson writes about tax issues and government accountability. Follow him on Twitter @davidmckay415 or email him at dwilson3@lohud.com

This article originally appeared on Rockland/Westchester Journal News: Mike Lawler SALT tax reform for married couples doomed by fractured GOP