Pascrell Offers Tax Amendment to Preserve Popular N.J. Deduction
WASHINGTON, DC – Today, U.S. Representative Bill Pascrell, Jr. (D-NJ), a member of the House Ways and Means Committee, authored an amendment to the Ryan-McConnell tax bill to retain the state and local tax (SALT) deduction. His amendment was offered during the Ways and Means Committee markup for the Republican tax bill, and voted down along party lines, 16-23.
On October 24, Rep. Pascrell offered an amendment in the budget bill to retain the SALT deduction in the Republican budget being considered by the House. His amendment was voted down by the Republican-controlled Rules Committee.
[Remarks as prepared]
Mr. Chairman, I have an amendment at the desk.
We know that this bill eliminates deductions for middle class families to give massive tax breaks to corporations and the wealthiest Americans.
One of the deductions on the chopping block is the state and local tax deduction, commonly referred to as SALT.
My amendment would restore the state and local tax deduction in full, including property taxes, state and local income taxes, and sales taxes paid.
After an outcry from members in their own caucus about the initial effort to eliminate SALT entirely, Republican Leadership amended their plan. They still ended the deduction for state and local income and sales taxes, but included a property tax deduction with a cap.
Now, some in the majority will tell you this is a compromise. Some have even tried to claim that this is a big win. But middle class families, particularly those from New Jersey and other high-tax states, will tell you that’s baloney.
I hate to break it to some of my colleagues, but they got rolled by this raw deal. And they shouldn’t be surprised when Chairman Hatch drops a bill later this week repealing the SALT deduction outright.
Any erosion of SALT is a tax increase, plain and simple. That is why I have been fighting retain this deduction for years and sent a bipartisan letter with 68 of my colleagues in June asking the Administration to preserve the deduction.
Data shows an average middle-class family of four with incomes between $50,000 and $200,000 who own a home will see a tax increase in every state in the country, with California, New York, Utah, Maryland, New Jersey and Virginia being among the hardest hit. In New Jersey, middle-class homeowners can expect to see a tax increase of 19.3 percent, or $1,140 on average.
The changes to SALT paired with changes to the mortgage interest deduction mean housing prices will also fall. I wouldn’t be surprised if my area of the country actually fell into a recession.
Earlier this year, Treasury Secretary Steve Mnuchin suggested that we need to repeal SALT to "stop subsidizing states."
I am not surprised that the Secretary was afraid to show his face at this mark-up. He knows too well that middle-class families in New Jersey already pay into the federal government 25 cents more for every dollar they get back. They should not be punitively targeted for revenue to give tax breaks to heiresses and big corporations.
In fact, while families will lose their deduction, businesses will continue to be allowed to deduct their state and local taxes!
Additionally, as a former Mayor, I know municipalities across the country rely on state and local property taxes and sales taxes for revenue to fund local services like education, public safety, and social services. The cuts in this bill would put pressure on states, counties, and cities to either cut services or raise taxes to make up the difference.
Services would be lost. The firefighters and police officers in my district have been adamant that this cut would be devastating to their ability to provide public safety services in their communities. Groups ranging from the realtors, mayors, service employees, teachers, sheriffs, business groups and many others support retaining SALT.
So, local economies, home values, education, and public safety are at risk by this reckless proposal. I know constituents in states and communities across this nation expect us to stand up for them.
Don’t take it from me. My friend Leonard Lance was quoted as saying the loss of SALT deduction will, “hurt New Jersey's hard-working middle-class families and our state economy.” Despite claims of this bill being a “pro-growth” tax reform plan, the only thing homeowners in our districts will see grow is their tax bill.
I urge my colleagues to support my amendment and restore the important SALT deduction, a bedrock of our tax policy for more than 100 years.
I yield back.