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Pascrell, Gottheimer Pledge to Work on Restoring SALT Deduction

Tuesday, November 20, 2018  
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Pascrell, Gottheimer Pledge to Work on Restoring SALT Deduction

Congressmen say it’s no accident that Republicans ‘got shellacked’ in midterm elections nationwide in districts hit hard by GOP cap on federal tax deduction

A blue wave in high-tax states like New Jersey and New York helped Democrats take back control of the House of Representatives. Now two members of the new majority from New Jersey say they will lead an effort to restore a full federal deduction for state and local taxes to help constituents hit hard by the GOP's unpopular decision to cap the write-off.

U.S. Reps. Bill Pascrell (D-9th) and Josh Gottheimer (D-5th) said that as soon as the new Congress comes together in January, they will introduce a bill to remove a $10,000 cap on the deduction that’s commonly referred to as SALT that Republicans put in place last year.

“With the new guard in Washington, a new day is coming,” Pascrell said during a news conference yesterday in Ramsey, one of the New Jersey towns that has been hit hard by the new cap, thanks to average property tax bills that topped $12,000 last year.

But even as they promised to wage a hard fight to restore the full SALT deduction, Pascrell and Gottheimer faced questions about how they will convince the Senate, which is still in the hands of Republicans, and GOP President Donald Trump to do an about-face on taxes. In response, they pointed to the results of the midterm elections, which saw Democrats make huge gains in the places that have been hit the hardest by the GOP’s tax law, including New Jersey where 11 of the state’s 12 congressional seats will be in Democratic hands.

“They (Republicans) just got shellacked in this last election because they basically raised taxes on New Jersey, New York, Connecticut and California, they raised tax us on,” Gottheimer said.

Big tax reductions for corporations

Among the many changes included in the 2017 federal tax-code overhaul signed into law by Trump was a lowering of individual income-tax rates and a significant reduction of the federal tax burden for corporations and those with large estates.

While several analyses show many New Jersey residents will get some modest tax relief thanks to those changes and others that came out of the Republican Congress, many others who itemize their deductions are now in line to see a hefty tax increase, largely due to the $10,000 cap on the SALT deduction, which had previously been unlimited. That’s because the average annual property-tax bill in New Jersey is nearly $8,700 and the per capita state income-tax burden for New Jersey residents totals nearly $1,500.

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