Lawmaker on SALT cap repeal: Vote could lower NJ property taxes
A New Jersey congressman is pushing a plan to repeal part of the 2017 tax overhaul orchestrated by President Donald Trump.
Legislation sponsored by U.S. Rep. Bill Pascrell that would repeal a $10,000 cap on federal tax deductions for state and local taxes has been passed by the House Ways and Means Committee. Pascrell's bill could be considered by Congress on Tuesday, with a possible vote set for Wednesday.
The Trump-backed SALT (state and local taxes) cap had the effect of raising overall taxes for many New Jersey homeowners, who pay some of the steepest property taxes in the nation, because they could no longer deduct a portion of those payments from their federal taxes.
“I have never seen a more punitive tax policy since I got into public life than the one that was passed in December of 2017,” Pascrell said during a news conference in Saddle Brook on Monday.
He said “giving our state tax relief is our top priority," noting the SALT deduction traces back to the Civil War. "It’s the oldest deduction on the books and it existed before the tax code.”
Pascrell said when the SALT deduction was capped, Jersey families were hurt.
“That tax scam law of 2017 remains one of the most destructive bills we’ve ever seen because it specifically went after the middle class," he said.
He said nearly two-thirds of New Jersey households earning between $75,000 and $100,000 used the SALT deduction in 2017, and the average deduction was around $19,000.
He said denying SALT deductions effectively leads to double taxation, since “the federal government is taxing income that has already been taxed.”
Pascrell's legislation calls for married couples to be able to deduct up to $20,000 of SALT on their 2019 tax returns. Starting in 2020, the SALT cap would be repealed entirely.
“Our middle class families will get relief quicker than the fastest acting aspirin, which cures pain in your body," Pascrell said.
Gov. Phil Murphy has long opposed the SALT cap, and his administration said this summer it considered legal action against the federal government when it blocked a potential workaround.
"We are the quintessential middle-class state," Murphy said. "Our people are hard-working and diverse. They have dreamed being deferred because of an unfair federal tax law that put them in its crosshairs. It’s time to restore tax fairness for our middle class.”
Pascrell acknowledged if the legislation is passed by the House it would face a tough fight in the Republican-controlled Senate.
“The odds aren’t good, but how do you know what’s going to happen?" he said. "Things happen. Anything can happen. I’m not giving up. Never give up.”
New Jersey is among just six states (along with New York, California, Illinois, Texas, and Pennsylvania) that claimed more than half (51.6 percent) of the value of all SALT deductions nationwide, according to an Oct. 2018 blog by The Tax Foundation, an independent tax policy non-profit.
You can contact reporter David Matthau at David.Matthau@townsquaremedia.com
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