The U.S. House of Representatives is poised to try again to allow taxpayers to deduct what they pay in state and local taxes from their federal income taxes.
H.R. 5377, cosponsored by U.S. Rep. Bill Pascrell (D-NJ) and approved last week by the Ways and Means Committee, would repeal the cap on State and Local Tax (SALT) deduction for 2020 and 2021. Pascrell was joined by New Jersey Gov. Phil Murphy in Saddlebrook earlier today to highlight the importance of the bill.
“Not only individual taxpayers have taken the hit, but the SALT cap forces our cities and towns into needlessly choosing between funding their schools, their roads, or their water services,” Pascrell said. “The legislation passed in the Ways and Means Committee will provide the significant and immediate tax relief New Jersey and tristate taxpayers have been rightly demanding. But this is only a first step, and we’re going to keep pushing until the legislation is approved by the full House, hopefully very soon.”
“We know this fight is far from over, and will continue to work in solidarity to restore full deductibility to residents in the 9th Congressional District, across the state of New Jersey, and in other states suffering under the current unfair tax law,” Murphy said. “I urge all members of the House of Representatives to pass H.R. 5377.”
The bill would actually make several changes to federal tax law, according to Pascrell’s office. It would eliminate the cap’s marriage penalty for 2019, enabling married taxpayers filing jointly to claim up to $20,000 in SALT deductions instead of the $10,000 limit, which applies to single and joint filers. It would also pay for the tax relief by restoring the top income tax rate of 39.6% from 37%.
In addition to providing SALT relief, the legislation will amend the U.S. Tax Code to allow first responders to take tax deductions for their uniforms and for tuition or related fees for professional development courses up to $500. Currently, first responders, including police, firefighters, and EMTs, often must pay for their own uniforms and the costs of uniform maintenance, paying out-of-pocket fees that range from $500 to $1,000, as well as for professional development courses that can average several hundred dollars.
The Hill reporter Naomi Jagoda noted that while the bill will likely pass the House, it has little chance in the Republican-controlled U.S. Senate. In October, a Senate vote to overturn regulations related to the cap failed.
“Addressing the cap on the SALT deduction is a big issue for Democrats from high-tax states such as New York, New Jersey and California,” she wrote.
But most Republicans defend the cap, arguing that it helps to prevent the tax code from subsidizing higher state taxes, she added.
Ain’t gonna happen. Murphy and the Bolsheviks in Trenton will just have to lower our taxes instead.
What great strategy ! Impeach the president then ask the Republicans to support your bill in the Senate.
I agree, the problem is why are our taxes so high that it exceeds the $10,000 limit; they should focus on fixing the problem of the high taxes, not being able to deduct more. Also why are we only allowed to deduct $15,000 (was $10,000 prior to last year) in real estate taxes for our NJ tax returns. Pascrell and Murphy are hypocrites, why don’t they allow us to deduct the full amount on our NJ returns not just the Federal return.
THE TRUTH HURTS……PLEASE INVESTIGATE THE FACTS….
The public sector services in low tax states are provided more efficiently and at much lower cost.
In addition, low tax states have right to work laws in which the public sector employees receive respectable but lower wages and respectable but not gold plated benefits.
The public sector contracts in low tax states go to the low bidder regardless of union affiliation.
The fact is that high tax states have created their own problem.
The tax payers in low tax states are firm supporters of the $10,000.00 SALT tax requirement.
Name a few states and do your own investigation! You seem to have an opinion with little to no facts to support anything.
Arizona and Florida residents are low tax states.
Their residents firmly support the SALT tax legislation.
I know because I have spent considerable time there and interfaced with many locals.
There is a reason why the SALT tax legislation was created.
Quite frankly the $10,000.00 marker may be too harsh.
I have to agree with the points previously brought up that sound clearly logical. N J has runaway property taxes. We have had governors and people running for. Governor and in congressional office that have wanted to reign in the runaway increases and clean up the runaway expenses on salaries and benefits for state employees. There’s was a great deal of pushback that got ugly. There is a highly inappropriate reliance on NJ property taxes for funding & spending in NJ on things that their regular working civilians can’t fathom. Altruism is a fairy tale.
I agree with you Jenliene! NJ property taxes are disproportionate to a person’s/family’s income taxes. People heading into retirement have to downsize as there are no real property tax breaks with the SALT taken away. Many people feel torn about having to leave the house they had for decartes.
Property taxes are deadly in Nj as a retiree considering leaving the state the local government is to blame putting too much burden on home owners and exuberant public spending despite thousands of condominiums in Jersey City mayor doubled the taxes they were sleeping for years. This kind of action is careless burdening old timers who are forced to go . Mayor favors wealthy allowing prohibitively priced condo buildings .L .Masson . Jersy City
Ed Quinn, agreed there is a lot/tons of waste here, but to continue blaming public employees is just a ruse. One of our late 90’s Govs borrowed from the pension system which was well funded and never PAID IT BACK. She was smart knowing everyone would be villifying public employees for it. (I do blame the 64% I spend on property tax for schools being the elephant in the room) Low bid is the law of the land in our state too. But to be the low bidder, they must be cutting corners somewhere, where costs need to be increased to ‘finish’ the job correctly or we get a 1/2 baked job because of politics, where I agree with you in part. ‘Best value’ where a technically acceptable bidder but is perhaps 1/3 up from the lowest works much better and results in more ‘honesty’ than a low bid sherade. If low bid worked so well , everyone would be driving the cheapest car possible, but spending more overall since they would break down more or simply not last half as long as a better overall value. It is time our so called Leaders STOP WASTING our money, and I agree 100% with you on that.
I have work in the private sector all my life.
For every 40 hours of pay I worked 50 to 60 hours.
My only public sector job was a summer employee of NYC Parks D4ept. Once I finished my job I could sleep under the boardwalk.
Thus I was paid for 8 hours with only 4 hours of work.