Newly introduced legislation in the House attempts again to provide New Jersey families and others across the nation with relief from the double taxation of the state and local tax (SALT) deduction cap.
Rep. Mikie Sherrill reached across the aisle to develop the Middle-Class Tax Relief Act with Rep. Mike Lawler (R-NY).
“Since day one, my constituents have asked Congress to right the wrongs of the 2017 GOP tax bill, which punished residents in states like New Jersey with double taxation,” said Sherrill.
Revisiting SALT Deduction
The SALT deduction cap has been an issue that North Jersey lawmakers have push to repeal since it was first enacted. Republicans running for Congress in 2022 seized on the issue for Dems being unable to repeal the cap while controlling both the House and Senate as well as the White House.
The SALT Caucus had threatened to not pass any legislation that did not include a repeal. But the members voted for the the Inflation Reduction Act that did not have the measure, saying bill did not raise taxes on families or small businesses in our districts. But Dems are still concerned that attempts to extend the cap will continue in the new Congress.
Raising the Cap on Salt Deductions
Under the legislation, significant increases to the cap on SALT deductions would be installed.
For single filers, the new cap would be increased to $100,000 from the current rate of $10,000 per household. Married couples filing would see the cap increased to $200,000 per married couple.
Sherrill noted this would fully eliminate the SALT dedication cap for 99% of for families in her district, and allow residents to deduct an additional $8 billion in state and local taxes over the next three year.
Common Sense Legislation
The 2017 legislation imposed the $10,000 cap on the SALT deduction, and opponents noted it violated 150 years of precedent in federal tax law.
Sherrill argued the taw law disproportionately harmed New Jersey, and imposed a marriage penalty on couples filing jointly as they had the same cap as individuals.
“This legislation will eliminate the cap on SALT deductions for virtually all NJ-11 families and alleviate the burden on New Jersey workers and businesses,” said the Congresswoman. “I came to Congress to create common-sense policies and get stuff done. By introducing this bipartisan legislation, we are one step closer to making life more affordable and improving the lives of NJ-11 families.”
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