• Some Republicans are once again targeting a cap on deductions for state and local taxes, aka SALT.
• The SALT deduction cap affects high-tax states like New York and California significantly.
• Part of the GOP tax and spending bill proposes raising the cap to $30,000, sparking debate.

A tax deduction known as SALT that helps affluent residents of high-tax states is standing in the way of President Donald Trump's "big beautiful bill."

A small group of Republicans is fighting to raise or abolish the $10,000 cap on the amount of state and local taxes you can deduct from your federal return that was originally introduced in Trump's 2017 tax law. Lifting that cap would allow high-earning taxpayers in states and cities with high taxes to cut down what they owe to the feds.

"It is a Republican principle to allow hardworking taxpayers to keep more of their hard-earned money," Rep. Nicole Malliotakis, a Republican from New York and member of the SALT caucus, a group of bipartisan representatives from states that would benefit from lifting the cap, said. "And that is the point that I have made over and over again in every room that I've been in on this discussion."

Whether or not you care about SALT depends on how much you pay in state and local taxes. Americans in higher-tax states, like New York or California, would benefit from being able to deduct more from their federal taxes, while residents of states like Tennessee and Florida have a much lower local tax burden.

The map below shows the per capita amount residents in each state pay in state and local taxes.

In fiscal year 2022, the most recent year available, Washington, DC, had the highest tax collections per capita. High rates are mainly due to the need to maintain federal property, the Tax Foundation said. New York and California followed DC in the ranking. States with the lowest collections per capita were mainly in the South.

The Tax Foundation said people making above $100,000, concentrated in six states, including Texas and New York, claimed 91% of the SALT benefit before the $10,000 cap was created in 2017.

Now, SALT is in Congress's crosshairs, with House Ways and Means Committee members voting for provisions that would raise that cap to $30,000. Marc Goldwein, the senior vice president and senior policy director for the Committee for a Responsible Federal Budget, said that the figure "gives a bigger tax cut to people that already got a pretty big tax cut" under the 2017 legislation.

Even so, the $30,000 already drew ire from SALT hawks, who want even more relief. Malliotakis said it wasn't easy to triple the deduction in this iteration, but now they're in negotiations to see what they can do to balance varying SALT interests.

Meanwhile, hardliner GOP members shot down the first iteration of the bill, saying they wanted deeper cuts in federal spending and to not increase the deficit — a big contrast to the Republicans hoping to deliver more relief in high-tax states.

Malliotakis said that they're in active discussions with the chairman, speaker, and other committee members "to figure out if we can sweeten the pot a little bit." Discussions have touched on a higher deduction number, income limits, and the length of time the deduction will be in place.

"At least we have a framework of what will satisfy the SALT caucus members or what potentially can satisfy the low-sodium members, as I like to call them," Malliotakis said. "And we will hopefully get to a good spot."

Do you have a story to share about the SALT deduction? Contact these reporters at [email protected] and [email protected].

• Some millennials and Gen Zers still live with their parents, particularly in the Northeast and West.
• Economic challenges and cultural factors drive young adults to put off forming their own households.
• Cities in Texas, Florida, and California had the highest shares of young adults living with parents.

Some millennials and Gen Zers are still opting to live with their parents, especially in the Northeast and the West.

A new Pew Research Center analysis looked at where younger Americans, ages 25 to 34, lived in a parent's home in 2023; cities in Texas, Florida, and California had the highest shares of these home-dwellers.

Five of the six metros with the highest shares were in California, with about a third of younger adults living in a parent's home. Meanwhile, the Midwest and the South had the lowest shares of young adults living with parents.

Young people are much more likely to live with their parents when jobs are hard to come by and wages are stagnant, Pew researcher Richard Fry, who authored the report, told BI. Previous Pew research also found that Black, Hispanic, and Asian young adults were more likely than their white counterparts to live with their parents.

"This may be reflecting economic differences in terms of being able to afford to live independently, and it also may be reflecting some cultural differences," Fry said.

There's also a gender gap: 20% of young adult men lived with a parent, while just 15% of women fell into that category.

The share of younger Americans living with their parents has dropped in recent years, coming down to 18% in 2023, but it's still well above historic lows in the 1970s. The 2008 financial crisis and Great Recession supercharged the trend, with many young adults living in their parents' homes for years after.

Many recent college graduates and millennials found themselves back in their parents' homes when the pandemic hit, closing schools and forcing widespread remote work. As of 2022, some Gen Zers considered it a more permanent arrangement, especially as housing costs and inflation raised the barriers to living independently.

A 2023 Pew survey found that nearly two-thirds of young adults who were living with their parents said it was good for their wallets. "Even if you got a job, even if earnings are coming in, as a young adult, you may indeed want to live with your parents because it improves your finances," Fry said.

Perhaps surprisingly, local housing markets didn't seem to have much influence on younger people living at home. The Pew analysis found that housing costs weren't strongly correlated with the rates of younger Americans living at a parent's home.

As BI previously reported, the reliance of Gen Z and millennials on their parents has led to new conversations on when — or if — to cut off support. After all, Gen Zers are facing their own set of economic hurdles, which may only be accentuated in another downturn.

It's not clear how the trend will change in the coming years — much depends on how well the US economy fares. And whether young adults rent or buy their own homes will have implications for the US economy, broadly, as well as their personal finances.

"Household formation is important for the national economy, so in terms of an economic driver, this is a bad thing," Fry said. But, if living with parents helps young adults "manage their finances and maintain their credit scores and be able to pay their student loan payments, that's probably a good thing."

Are you an adult living with a parent or a parent with adult kids living at home? Reach out to these reporters to share at [email protected], [email protected], and [email protected].

• The IRS is the latest agency to be hit with probationary worker terminations.
• The firings come as agencies across the government have seen their workforces slashed.
• IRS staff were told of the cuts Wednesday in a memo asking them to be in the office Thursday and Friday.

An IRS worker woke up Thursday morning to find a slew of emails saying they were locked out of work software. By noon, they'd been fired.

"We've been waiting for the shoe to drop since Inauguration Day," an IRS probationary worker told Business Insider before termination letters were sent out. "It's been exhausting and at this point, we are all just ready for the Band-Aid to be ripped off."

Now, the proverbial Band-Aid is off.

A termination letter viewed by BI said the agency was removing probationary staff from their positions based on "current mission needs" and because their "continued employment at the Agency is not in the public interest."

It also said that the termination is "taking into account your performance," which an employee who received the letter called a "bullshit" reason. The letter added that employees can appeal with the Merit Systems Protection Board within 30 days of the termination notice.

Some probationary workers are still waiting to receive word on their terminations. One said that they "just want it to be done." Another is waiting in the office and said the mood is somber.

These terminations could specifically hit the jobs responsible for enforcement and tax evasion. One source who was fired told BI that they were tasked with investigating tax compliance and alerting the IRS of any findings of fraud or evasion.

Vanessa Williamson, a senior fellow in Governance Studies at the Brookings Institution and the Urban-Brookings Tax Policy Center, also said on a Thursday press call that the terminations could "disproportionately affect enforcement" because the Inflation Reduction Act invested in new hires in that department. Firings are focused on probationary employees, many of whom are new hires who have been at the IRS for less than a year.

"When you underpay and understaff the IRS, the agency doesn't have the power or the resources it needs to go after wealthy tax evaders with their high-priced lawyers," Williamson said.

The firings were signaled earlier this week in a memo telling staff to come into the office Thursday and Friday and bring any "government-issued equipment."

It said coming in at short notice "may be an inconvenience, and we truly appreciate your flexibility."

"Under an executive order, IRS has been directed to terminate probationary employees who were not deemed as critical to filing season. We don't have many details that we are permitted to share, but this is all tied to compliance with the executive order," the email, sent Wednesday and seen by BI, said.

The extent of the cuts is unclear, but Office of Personnel Management data showed that 14,130 of the nearly 95,000 federal civilian workers for the IRS had less than a year of service as of May.

The Associated Press reported on February 15 that the agency was set to terminate thousands of probationary workers. On Tuesday, the president of the Kansas City National Treasury Employees Union local — the umbrella union for IRS workers, among others — said that probationary workers were set to be terminated.

A Q&A form sent to the managers of terminated IRS employees — reviewed by BI — on Thursday said that affected workers who were on leave would have their leaves canceled and are expected to report to the office to return their equipment. Employees will be paid for the full day on February 20, the form said, and they're expected to be notified of their terminations by noon that same day.

The National Treasury Employees Union, which represents IRS workers, already filed a lawsuit on February 12 asking a judge to deem widespread probationary worker firings — along with the "Fork in the Road" deferred resignation program — unlawful.

Representatives for the IRS, the White House, and DOGE did not immediately respond to requests for comment.

The cuts at the IRS follow other agencies slashing their probationary workforce, including the Office of Personnel Management.

"Right now, I'm just going from crying to just trying to figure everything out," an OPM worker, who was terminated and is considering where to apply to next, previously told BI.

Some probationary workers from various agencies who were told they were fired on performance-based grounds are already pushing back, with some turning toward their unions and potential litigation.

One attorney expects more job cuts in the federal workforce and thinks they won't just be aimed at probationary workers.

"We're in the mass termination of probationary employees," Michael Fallings, a partner at the law firm Tully Rinckey PLLC, said.

"What's likely next is the reduction in force procedures, which is really the official, correct way to reduce the size of federal workforce that you even saw past administrations utilize," he added.

Are you a federal worker with a story or information to share? Contact these reporters via Signal at julianakaplan.33 and madisonhoff.06, or via email at [email protected] and [email protected].

• Minimum-wage workers in California, Vermont, and 19 other states will earn more at the start of 2025.
• Missouri voters passed a referendum in the November election raising the state's minimum wage.
• An analysis found over 9 million workers will likely be affected by the coming minimum wage increases.

Workers in 21 states are set to start the new year with a raise.

When the clock strikes midnight on New Year's Eve, minimum wages across the nation are set to be hiked. In a few states, the minimum wage will rise to $15 an hour, a longtime target rate for advocates.

Hover over the states in the map below to see how much minimum wages will change.

Of the 21 states that will see an increase, 14 are subject to inflation-based adjustments as part of existing minimum wage laws, per a report from the left-leaning think tank Economic Policy Institute. The EPI report estimated that full-time impacted workers in those states will see their annual earnings increase by $420 on average.

In the November election, Missouri voters approved a referendum to increase the state's minimum wage to $13.75 on January 1, 2025, and then to $15 in 2026. Some small business owners in the state are reportedly already bracing for higher costs, and business groups there have already filed a legal petition to attempt to overturn the new proposition. Recent research has found that independent businesses are, on average, able to shoulder minimum wage increases — although higher minimum wages can lead to smaller restaurants shuttering.

A 2022 ballot initiative in Nebraska has the state on a similar trajectory, with workers set to get an increase to $13.50 in January 2025 and then a hike to $15 in 2026.

Alaska will increase the state's minimum wage to $11.91 on January 1 because of an inflation adjustment. Minimum wage workers will get another raise on July 1 because of a ballot measure in the recent election. The state minimum wage will rise to $13 in the summer, $14 the following July, and $15 in 2027. Its minimum wage would be adjusted for inflation after that.

Delaware and Virginia are the only states in the South that will see minimum wage increases at the start of the year. Five states in the South don't have minimum wage laws, and Georgia's minimum wage is below the federal minimum wage of $7.25, based on data from the Department of Labor. That means those states default to the federal minimum.

An analysis from the Economic Policy Institute found that over 9 million workers are set to directly and indirectly benefit from increased state minimum wages.

Out of those workers, just over 3 million are directly set to see their pay go up. Even more will be affected indirectly. Over 6 million workers are within 15% of the new minimum wage floor — which, per EPI, means their employers are likely to adjust their wages to compete for talent.

In addition to state minimum wage increases happening in almost two dozen states on January 1, the National Employment Law Project said 48 cities and counties will also have minimum wage increases that day.

Nationally, the federal minimum wage has sat untouched at $7.25 since 2009. President-elect Donald Trump has signaled that he could be open to changing that number, telling "Meet the Press" that he would consider raising the federal rate — although he noted that the cost of living across the country varies, making it difficult to enact one flat rate.

Mike Draper, the owner and founder of screen-printing and retail business RAYGUN, whose 10 stores include a location in Missouri, told Business Insider that minimum wage increases — like the one recently approved by that state's voters — could help bolster workers' spending power. Draper already pays his workers a starting wage of $15.50 an hour.

"This is different from a tax increase, or a rent increase, or a cost of goods increase. None of that money is going to go directly back into your community, for the most part," Draper said, adding: "Increases to worker pay is going to be felt immediately."

Are you set to see your wages go up on January 1? Contact these reporters at [email protected] and [email protected].

• President-elect Donald Trump said in an interview that he "would consider" raising the federal minimum wage.
• It has been at $7.25 per hour since 2009; however, 30 states and DC have increased their minimum above the federal level.
• Here's where it stands in every state and the raises both parties have proposed.

President-elect Donald Trump said he'd consider raising the federal minimum wage. It's been $7.25 per hour since 2009, though 30 states and a slew of cities have adopted higher rates.

"It's a very low number," Trump said in an interview with "Meet the Press" that aired on December 8. While he didn't commit to a specific level, he said that a federal minimum of $8 or $9 "might have very little effect" because of the low cost of living in some areas.

Any raises to the federal minimum wage would directly affect workers in at least the 20 states where, as of July, the minimum wage was at or below the federal level, per the Department of Labor. Most minimum wage jobs are in the service sector, largely in food preparation and serving-related positions.

Washington, DC, has a higher minimum wage than any state in the country at $17.50, though some US cities have raised it even more. Washington state, with a minimum wage of $16.28, and California, with a minimum wage of $16, came in second and third, respectively.

On January 1, 21 states — and 48 cities and counties — are set to see their minimum wages increase, mostly as a result of existing laws, per the National Employment Law Project. In the most recent election, Missouri voted to raise its minimum wage to $15 an hour by 2026, and Alaska voted to hike its minimum to $15 by mid-2027.

The last federal minimum increase was in July 2009, from $6.55 to $7.25. Since then, overall prices based on the consumer price index have gone up around 47% in the US as of November.

Trump pointed out in his "Meet the Press" interview that the cost of living varies across the country, and a federal wage might not be a one-size-fits-all solution.

"The other thing that is very complicated about minimum wage is places are so different," he said. "Mississippi and Alabama and great places are very different than New York or California in terms of the cost of living and other things."

Indeed, regional price parities data from the Bureau of Economic Analysis show that Mississippi and Alabama had among the lowest costs of living in the country in 2023, while California and New York were more expensive than the national average. Alabama and Mississippi don't have state minimum wage laws. The minimum wage in New York is $16 in New York City, Long Island, and Westchester, and $15 for the rest of the state.

While Trump said wage changes like California's — which hiked it to $20 for fast food workers in April — might go too far, "there is a level at which you could do it, absolutely." He said before making any changes, he'd want to speak to governors.

President Joe Biden backed a $15 wage, which every Republican senator and eight Democrats ultimately voted against. Some lawmakers on the left have gone even further, with Sen. Bernie Sanders pushing to raise the wage to $17 by 2028.

Some Republicans have also proposed raising the federal minimum wage. While he was still in the Senate, Vice President-elect JD Vance cosponsored a bill to gradually increase it to $11, although that bill also includes additional measures like raising penalties on employers that hire workers living in the country illegally.

The Trump-Vance transition team did not immediately respond to a request for comment from Business Insider on Trump's potential plans for the minimum wage.