Trump's Promise-Fulfilling Week? Beyond Reciprocal Tariffs, GOP Tax Cuts Set to Deliver Good News

TradingKey – As the public awaits President Donald Trump’s formal announcement of reciprocal tariffs on April 2, his tax-cut agenda may also notch a milestone victory this week.

According to Bloomberg, U.S. Republicans are drafting a tax bill that includes raising the state and local tax (SALT) deduction cap from $10,000 to $25,000.

The SALT deduction cap primarily affects higher-income taxpayers, representing 10–15% of all filers. The Tax Policy Center estimates that if the $10,000 cap is raised or eliminated, at least 90% of the benefits would go to households earning more than $200,000 annually. 

These households are mainly concentrated in traditional "blue states"—such as New York State and New Jersey, both Democratic strongholds—while traditional "red states" with relatively lower tax burdens will be less affected.

If Republicans succeed in raising the SALT cap, it would mark a major political win for House Republicans in swing districts across New York City and Southern California. They aim to leverage the expanded deductions as part of a broader push to pass new tax-cut legislation.

To offset potential revenue losses, insiders suggest Republicans may scale back certain corporate tax deductions.

Additionally, after the House passed a GOP-backed budget resolution outlining $4.5 trillion in tax cuts over the next decade, the Senate is expected to vote on the measure later this week.

Senate Majority Leader John Thune stated, “In the very near future, we will be taking up a budget resolution to lay the groundwork for legislation to make the 2017 tax relief permanent, secure the border, unleash American energy and provide for our nation's defense.”

Asked by reporters about the timing, Thune replied, “Maybe later in the week.”