Gottheimer, Murphy Call for SALT Deduction to be Reinstated in Next Aid Package

Support is building to include reinstatement of the full State and Local Tax (SALT) deduction in any forthcoming coronavirus economic federal relief package.

With discussions about the next inevitable coronavirus-related bill starting, Rep. Josh Gottheimer and Gov. Phil Murphy both publicly stated they want Congressional leadership to include reinstatement of the deduction in any economic relief package. 

“New Jersey is already an expensive place to live, and, right now, the coronavirus outbreak is hitting us hard—impacting our families, their jobs, their incomes, and local business owners,” said Gottheimer. “That’s why I’m calling on Congressional leadership to include in the next coronavirus relief package a full reinstatement of our SALT deduction, to get real tax cuts to help rescue Jersey families from this health and economic crisis.” 

Pelosi’s Plan

Speaker of the House Nancy Pelosi suggested the next package include a retroactive rollback of a tax change that hurt states like New Jersey, New York and California, reported The New York Times. Pelosi’s proposal would have Congress retroactively undo the SALT provision Republicans included in their 2017 tax overhaul. preventing households from deducting more than $10,000 a year in state and local tax expenses from their federal tax bills.

The Speaker is reportedly focused on something narrower than a full SALT rollback, focusing it on middle-class earners and include limitations on the higher end. A full rollback would provide increased tax rebates to an estimated 13 million American households.

Bipartisan Support

Gottheimer co-sponsored bipartisan legislation to restore the SALT deduction that passed the House in late 2019, but has been stalled in the Senate.

The congressman noted reinstating SALT would provide Northern Jersey families with real tax cuts as the state continues to be hit hard by the coronavirus outbreak. 

“For years now, ever since Jersey got whacked with higher taxes, I’ve been fighting to fully reinstate SALT and finally cut taxes for North Jersey,” stated Gottheimer. “Our state has the second highest number of coronavirus cases in the country, and with those numbers continuing to rise, our families need real economic relief.”

Treat New Jersey Differently

Gov. Murphy said he talked to Speaker Pelosi at least twice about the next phase bill, with priorities centered on assistance for workers, small businesses and flexible aid for states facing the brunt of this virus.

“New Jersey and New Jerseyans who are in the eye of the storm should not be treated the same way as states less impacted by this invisible enemy,” stated the Governor.

Murphy cited Reps. Gottheimer and Bill Pascrell for their work on reinstating the SALT deduction. 

“As we continue to think about a main street stimulus, Congress should undo the SALT deduction cap to help New Jersey’s middle-class homeowners,” said the Democratic governor. “Speaker Pelosi and I spoke not just about the general need for another step and another bill and stimulus coming from Congress, but specifically spoke about lifting the SALT cap.”