A cohort of about 20 Republican House members from New York, New Jersey and California was invited to meet with President-elect Donald Trump at his Mar-a-Lago estate Saturday ahead of a looming fight over an extension of his 2017 tax cuts.

Much of the group is likely to attend and plans to discuss increasing the $10,000 cap on state and local tax deductions, which has disproportionately hurt voters in the three high-tax states, according to Representative Nick LaLota, who represents eastern Long Island in New York. 

Republicans in Congress are in the beginning stages of negotiating a package that will extend Trump’s 2017 tax cuts — including the future of the cap on the SALT deduction, which will otherwise expire — and address the other legislative priorities of immigration and energy production. The meeting is a positive sign for lawmakers seeking to expand the deduction, a politically divisive write-off that reduced tax bills for some residents of high-tax states.

In an interview with Bloomberg, LaLota said the group of lawmakers includes four other representatives who are banding with him to push for a “reasonable” adjustment to the cap on so-called SALT deductions. The cap was imposed as part of the 2017 bill.

“There are five very salty Republicans — I would expect that somebody in his position would appreciate that dynamic and would want to provide an accommodation to get the bill passed,” he said. “The five of us have the opportunity to effectuate an even more beautiful, big bill.”

The group, which also includes New Yorkers Andrew Garbarino and Mike Lawler, New Jersey Representative Tom Kean and California’s Young Kim, will push to expand the deduction — currently capped at $10,000 regardless of marital status — that would deliver big savings to their constituents as part of a larger tax package, said LaLota. 

While he declined to comment on what the group would consider to be an acceptable cap, last month he said that a potential plan by Trump’s economic advisors to double the tax write-off limit to $20,000 “is not reasonable.” He also told Bloomberg the removal of the so-called marriage penalty — the fact that the limit is the same for both single and married taxpayers — on its own would be insufficient for the “salty” five.

Spokespeople for Lawler, Garbarino and Kim confirmed their plans to attend the meeting with Trump, while Kean’s spokesperson didn’t respond to a request for comment. Spokespeople for Trump did not immediately respond to a request to comment.

“I’ve been very clear, and I think my colleagues will understand it, that SALT has to be included” in the bill, Lawler said in a separate interview Tuesday. “There’s already an understanding that that’s the case, so I’m not concerned.”

Because of its slim majority in the House, the GOP can only afford to lose the support of a couple congressional Republicans in order to advance the bill through a process known as budget reconciliation. The process, which would allow the GOP to pass legislation only with Republican votes, depends on near-universal agreement within its narrow majorities in the House and Senate. That puts great pressure on Trump and Republican leaders to negotiate a package that appeases both their far-right flank as well as members from the New York City-area and Southern California, for whom expanding the SALT deduction is a political priority.

“The math dictates that any small group of members can block anything that is going to be Republican,” he said. “And that math isn’t just particular to the SALT discussion, but just about anything and everything we do here in this town. That said, that President Trump is bullish on SALT and wants to provide a fix and is inviting us to Mar-a-Lago to be a part of that fix gives me great optimism.”

While it was Trump who curbed the tax break as part of his signature 2017 legislation, on the campaign trail he vowed to expand the cap. LaLota credited the change of heart to efforts by lawmakers to develop a relationship with Trump.

In addition to taxes, LaLota said that he and Lawler also plan on discussing with Trump New York City’s congestion pricing toll, which went into effect this week and charges drivers $9 for entering Manhattan’s central business district. Trump had said he opposes the fee.

LaLota said the toll especially hurts suburbanites from his and Lawler’s districts, who “should not be a piggy bank to the bloated MTA.”

Job growth and hourly earnings growth moderated in the latter part of 2024, according to the payroll processor Paychex.

The Paychex Small Business Employment Watch tracks job and wage growth at U.S. businesses with fewer than 50 employees and found the national jobs index was relatively unchanged (0.02 percentage points) in December and has changed little since the summer. Hourly earnings growth was 2.96% in December, staying below 3% for the fifth month in a row.

“The pace of job growth among U.S. small businesses downshifted slightly as 2024 progressed, yet small businesses remained resilient throughout the year.” said Paychex president and CEO John Gibson in a statement. “As we head into 2025, small business owners continue to face some challenges such as access to growth capital, rising health care costs, and ability to hire qualified talent. In spite of this, optimism and hiring intentions improved to close the year — both trends that will be worth watching as we begin 2025.”

Weekly earnings growth (2.54%) slowed to a four-year low in December, and weekly hours worked growth (-0.43%) remained in negative territory year-over-year for the 21st consecutive month, hitting its lowest level since July 2022. Three-month annualized hourly earnings growth (3.02%) was above 3% for the first month since April. Tampa (4.56%) topped the rankings among metropolitan areas for hourly earnings growth for the second month in a row. 

The national small business jobs index averaged 100.22 in 2024, representing modest employment growth. However, the national jobs index slowed 1.32 percentage points from 101.21 in December 2023 to 99.89 in December 2024.

The Midwest ranked as the top region for small business employment growth for the seventh month in a row, at 100.20 in December. Wisconsin, at 100.77, led the way among Midwestern states and ranked in second place among all states for job growth in December, marking its best rank since March 2020.

For the second month in a row, Dallas (101.73) and Houston (101.16) ranked in first and second place, respectively, among metropolitan areas for job growth in December.

Trump’s tax policy guy; states copy the feds; what’s in a name; and other highlights from our favorite tax bloggers. 

And we’re off

• Current Federal Tax Developments (https://www.currentfederaltaxdevelopments.com/): Out with the good news and in the bad: Matthew Hutcheson, convicted of wire fraud in 2013 and sentenced to 17 years, had his remaining sentence commuted by President Biden as part of his end-of-term pardons. Three days into this year, though, the Tax Court tagged Hutcheson for taxes on what he’d embezzled that led to those convictions.
• TaxProf Blog (http://taxprof.typepad.com/taxprof_blog/): A look at Ken Kies, named by Trump to be Treasury assistant secretary for tax policy. 
• Don’t Mess with Taxes (http://dontmesswithtaxes.typepad.com/): Time’s running out for 2025’s first batch of taxpayers who got filing extensions due to disasters in 2024.
• Mauled Again (http://mauledagain.blogspot.com/): A new year, an old problem and a fresh, different stage: A look at a recent IRS warning about tax lies on social media.
• TaxConnex (https://www.taxconnex.com/blog-): Every new year brings a ton of developments in all varieties of tax (with the next couple of years being People’s Exhibit A). Sales tax, driven by burgeoning ecommerce, again has more than its share of trends on tap.
• U of I Tax School (https://taxschool.illinois.edu/blog/): A look back at this blog’s top entries of 2024 include such topics as employees versus contractors, 1099-Ks and the ever-popular beneficial ownership information reporting.
• John R. Dundon II EA (http://johnrdundon.com/blog/): Why the blogger recommends voluntary BOI filing no matter the back and forth on the subject in courts.

Great minds

• Taxbuzz (https://www.taxbuzz.com/blog): “Rob Gronkowski and Elon Musk Agree: It’s Time to Simplify the U.S. Tax Code.”
• Tax Vox (https://www.taxpolicycenter.org/taxvox): States can be labs for tax moves, but the reverse can also happen: The federal Child Tax Credit has inspired Minnesota to launch its own credit.
• The Buzz About Taxes (http://thebuzzabouttaxes.com/): In the landmark Bruyea v. United States decision, the U.S. Court of Federal Claims has ruled in favor of a dual Canadian-U.S. citizen, allowing a treaty-based foreign tax credit to be applied against the NIIT.
• Institute on Taxation and Economic Policy (https://itep.org/category/blog/): How undocumented immigrants do pay a hefty share of taxes.
• Gordon Law (https://gordonlawltd.com/blog/): Could Puerto Rico become the next big crypto tax haven?

Detail-oriented