House Speaker Mike Johnson said Republicans are discussing raising the state and local tax deduction cap to $30,000 — among other options — as the party seeks to resolve disagreements on the details of President Donald Trump’s tax package.

“I’ve heard that number, and I’ve heard others as well,” Johnson told reporters on Thursday.

“It’s still an ongoing discussion amongst the members, and I think we’ll find the right point,” he added. “I’m not going to handicap it because I’m not sure exactly what that is, but there’s a lot of analysis that’s going into it.”

Republicans are seeking a deal between members from New York, New Jersey and California — who had threatened to block the bill without a sufficient increase to the $10,000 cap on SALT deductions — and House leaders who are navigating the political realities of pushing an expensive tax bill through their narrow majority.

One lawmaker, New York’s Nick LaLota, immediately dismissed the $30,000 cap, saying that would not pass the House.

“I feel like I’m buying a used car and the dealer won’t name the price,” he said.

Tax committee lawmakers said they’re trying to come to a decision on the SALT deduction later Thursday.

Other members — New York’s Mike Lawler and Andrew Garbarino, New Jersey’s Tom Kean and Young Kim of California — have threatened to reject any tax package that does not raise the SALT cap sufficiently. Those members have been reticent to publicly say how high the deduction cap needs to be to earn their votes.

The SALT issue has been one of the most contentious for the House GOP to resolve as party leaders try to ram a multitrillion-dollar tax cut package through the House in May. The larger the cap adjustment is, the less money there will be for other tax cuts on the Republican agenda.

The House Ways and Means Committee is scheduled to consider that tax portion of the bill on Tuesday, an implicit deadline for lawmakers to come to an agreement on SALT.

Republicans are also sparring over spending reductions in the bill, including weighing cuts to Medicaid health coverage and nutritional programs for low-income households.

Conservative Ralph Norman said that if moderates get a $30,000 SALT cap, then they need to agree to even deeper spending cuts such as to Medicaid.

House Republicans are considering nixing a Medicaid drug pricing plan floated by President Donald Trump and fiercely opposed by the pharmaceutical industry as the party pushes to strike a massive tax and spending deal in the coming days. 

But drugmakers may not be totally off the hook. 

Lawmakers have separately discussed eliminating a tax deduction for pharmaceutical advertising, Representative Vern Buchanan, the chairman of the House tax committee’s health subcommittee, said Thursday. It’s unclear whether that provision will be in the final tax cut package.

“I know it’s been brought up, so I don’t know where it landed,” Buchanan said.

Representative Richard Hudson of North Carolina, a senior Republican on the Energy and Commerce Committee, signaled Thursday that the drug pricing plan may be scrapped. 

The idea, first floated last week by the White House as a way to help pay for the president’s tax cut plan, blindsided the pharmaceutical industry and has prompted a furious lobbying campaign. Drugmakers said it could cost them $1 trillion over the next decade. 

While lawmakers may be poised to reject Trump’s drug pricing plan, the president is unlikely to abandon the concept entirely. During his first term, he pursued regulatory avenues to accomplish similar goals, and could do so again. Bringing foreign drug pricing into U.S. government programs could hurt drugmakers’ revenues.

The potential elimination of the TV ad deduction, meanwhile, could get backing of some in the Trump administration. 

Pharmaceutical ads have come under special scrutiny as most other countries don’t allow drugmakers to run television ads, and Health and Human Services Secretary Robert F. Kennedy Jr. has called to ban the television ads entirely.

Currently, pharmaceutical companies can deduct advertising costs as expenses on their taxes, which is standard for other industries, too. 

Greg Murphy, another Republican member of the Ways & Means committee, introduced legislation to eliminate the pharma ad tax deduction last month. In announcing the legislation, Murphy said the television ads lead to “inappropriate prescribing practices.”

The taboo around discussing and comparing accounting salaries is slowly fading. New salary transparency legislation is being passed in states like New York and California. Thousands of accountants are using salary comparison websites to view and share salary data openly. Having more transparency around pay is a boon to employees and job seekers alike. But can pay transparency also benefit employers? The answer is a resounding yes.

When a firm is following a data-driven approach to compensation — for instance, by comparing its salaries to industry benchmarks for each position — it can help set reasonable compensation expectations for employees. For example, some of my previous employers committed to benchmarking our compensation to the 75th percentile, communicated it to employees, and showed the calculations they used to arrive at their conclusion. From that point forward, anyone who was unhappy about their compensation could no longer claim they were “underpaid.” Instead, they had to approach their pay argument from a more quantitative perspective. 

To justify being paid beyond the 75th percentile, a team member would have to show why their contributions to the business were well beyond the 75th percentile — and how their efforts were reflected in the company’s performance. In this scenario, it’s important for the 75th percentile to be based on data relevant to the employee. For example, according to our firm’s data, a tax manager at the 75th percentile across the U.S. in 2024 has a base salary of approximately $150,000. But in the case of an employee working in-office in New York City, that same 75th percentile would be a $183,000 base salary to account for a higher cost of living.

Any increase in salary beyond the benchmark would need to be accompanied by a commensurate increase in company performance beyond that benchmark. As a result, the firm becomes more results driven and employees become better aligned with the company’s goals. 

Improving engagement through psychological security

Being transparent when setting compensation is a great way to align employee incentives with company performance. Further, it provides a great amount of psychological safety. There aren’t many professionals who are more numbers-driven than we accountants. It’s natural to wonder if you are optimizing your earnings by staying at your current firm or jumping ship. I’ll get to that in a minute. Just know that thinking about your comp takes up a lot more mental energy than you might think. Replaying your last compensation discussion over and over in your head can be stressful and counterproductive. It’s easy to spend an inordinate amount of time thinking about your next steps for getting a promotion or perusing through open jobs online to see if your current compensation is at the “market” rate.

You can put your mind at ease when you are confident that your firm is taking care of you and is making its best efforts to ensure your compensation is in line with market rates. When the psychological burden of pay equality is lifted, you can focus better and do your best work. That’s great for you and great for the firm.

Avoiding inequities and the dreaded loyalty tax

When employers don’t take a data-driven approach to compensation discussions, however, pay inequity continues in two important ways:

1. Employers end up being reactive rather than proactive. If an employee comes forward with a competing offer, they try to match it; if someone negotiates harder, they capitulate. And they end up with a number of employees with the same job titles providing similar value, with comparable experience, but who are paid vastly differently. And these pay disparities inevitably come to light, which reduces the team’s morale, productivity and loyalty to the firm. They may also find themselves guilty of perpetuating a gender pay gap or succumbing to unconscious biases.

2. Employers inadvertently create a “loyalty tax.” They are flexible on salaries to attract talent to the firm but are not offering the same salary bands to internally promoted employees. So, they end up creating a vicious cycle in which employees feel they must change jobs every few years in order to be paid competitively. That’s a drain on all parties involved as the firm loses institutional knowledge and must bear the costs of constantly recruiting, hiring and training new talent. Meanwhile employees feel they must leave a firm — no matter how happy they are there —- if they want to be compensated competitively. This can be avoided when firms are transparent about their compensation policies and adhere to them. 

So, where’s the line?

If you’re an employer, I’m not proposing you leave a spreadsheet in the company breakroom containing everyone’s salary information. Some companies opt for a radical level of transparency, but that’s not necessary to reap the benefits I’ve discussed above. Just having a system you stand by can change compensation discussions from emotional to objective. This makes everyone more productive on your team and reduces hard feelings.

One way to do this is to share the way you benchmark salaries openly, and at what percentile you are looking to peg salaries. Even if you aren’t meeting an aggressive benchmark like the 75th or 90th percentile, you can communicate clearly to employees that the firm is choosing a given benchmark because it makes up the salary gap by offering a generous vacation policy, reduced workload or maybe reduced summer hours.

As my mom always told me growing up, honesty is the best policy.