Republicans’ tax-and-spending cut package faces a number of hurdles in its path to President Trump's desk, but the state and local tax (SALT) deduction cap could be the tallest to surmount.

Tax writers on the House Ways and Means Committee initially offered to raise the cap to $30,000 for joint filers making up to $400,000 a year. But suburban Republicans from higher-tax blue states said that number wasn't going to cut it.

Republican members of the SALT Caucus have advocated for a $62,000 cap and $124,000 for couples. GOP leadership reportedly discussed raising the cap to $40,000 for individuals and $80,000 for couples with hard-liners in their conference over the weekend.

A proposal floated late Tuesday would increase the SALT deduction cap to $40,000 — quadruple the current $10,000 cap — for individuals making $500,000 or less in income, three sources told The Hill. One source said the level would increase 1 percent a year over 10 years.

Here’s a look at what the SALT deduction cap is, how it works within the broader tax code, and why it’s controversial enough to jeopardize the entire GOP agenda.

What is the SALT cap?

SALT is a tax break that lets taxpayers deduct part of what they owe in state and local taxes from their federal tax return. Prior to 2017, the deduction was unlimited, but the tax reforms in that year capped it at up to $10,000.

That cap is worth thousands of dollars to millions of typically higher-income taxpayers, who itemize their deductions instead of taking the standard deduction. Different estimates from the Joint Committee on Taxation put the cost of an unlimited deduction at around $1 trillion over the next decade.

Before 2017, the average SALT deduction was around $13,000, according to the Urban-Brookings Tax Policy Center. That’s $3,000 higher than where it was capped.

In 2022, nearly

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