Democrats block big tax break for New Jersey couples

💸 NJ residents will not see a bigger federal tax break for property taxes

💸 Democrats from NJ helped defeat the Marriage Penalty Elimination Act

💸 The measure would have increased the federal deduction for property tax paid

New Jersey Democrats helped to defeat a bill in Congress that could have given thousands of New Jersey families a big, needed tax break.

A procedural vote on lifting the cap on property tax deductions for married filers failed on Wednesday, essentially killing what was known as the Marriage Penalty Elimination Act.

Oddly, many of New Jersey's congressional Democrats have supported repealing what is known as the SALT cap and the bill itself was sponsored by Rep. Mikie Sherrill (D-NJ11), a Democrat from Montclair.

The measure was co-sponsored by Republican Rep. Tom Kean (R-NJ7).

"New Jersey families need tax relief right now," Kean said on the floor of the house, "This specific approach to doubling the joint returns cap is a critical and necessary step to taking the tax burden off the backs of our neighbors."

Republicans went along with imposing a $10,000 cap on the federal tax deduction for state and local taxes (SALT) in 2017 to help pay for then-President Donald Trump's tax cuts.

Prior to 2017, there was no cap on the federal deduction for state and local property taxes.

That cap hit high tax states like New Jersey particularly hard where many property tax bills far exceed $10,000 dollars.

The Marriage Penalty Elimination Act would have allowed couple to deduct up to $20,000 on their federal returns. It would not change the cap for single filers or head of household.

Democrats in New Jersey had been lobbying for a repeal of the SALT cap for the last seven years.

Only this time, they weren't.

New Jersey Democratic Rep. Bill Pascrell (D-NJ9) called this latest measure "badly flawed" and a "far cry from middle-class tax relief."

Democrat Josh Gottheimer (D-NJ5) was present for yesterday's vote, but did not vote on this measure, even though he has been a strong proponent of repealing the SALT cap.

Neither did Sherrill, even though it was her bill.

A spokesperson for Sherrill blamed Republican leadership, saying House Speaker Mike Johnson "set this legislation up to fail."

Under the 2017 legislation, the cap on state and local property tax deductions will expire after the 2025 tax year.

Many Republicans have continued to support the cap believing it allowed Democratic-controlled states to justify higher taxes instead of working to lower them. Others say the deduction was nothing more than a tax break for the rich.

The nonpartisan Tax Foundation has reported raising SALT cap to $20,000 would primarily benefit couples who earn more than $200,000, with as many as half at that income level getting a bigger tax cut.

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