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Republicans Deny Pascrell Budget Amendment to Retain SALT Deduction

Rep. Pascrell's amendment to strike the elimination of the state and local tax deduction from the Republican budget was ruled out of order

Today, U.S. Representative Bill Pascrell, Jr. (NJ-09) offered an amendment to retain the state and local tax (SALT) deduction in the Republican budget being considered by the House. His amendment was ruled out of order by the Republican-controlled Rules Committee.

"New Jersey already pays some of the highest property taxes in the country, and eliminating the state and local tax deduction to fund tax breaks for hedge fund managers and corporate CEOs is completely unacceptable. Roughly 40 percent of filers in New Jersey utilize this deduction and it will disproportionately hurt middle class families," said Rep. Pascrell, New Jersey’s only member of the House Ways and Means Committee. "This deduction has support from Republicans as well as Democrats, yet the Republican budget allows businesses to claim this deduction while demanding a double tax on what homeowners already pay in property taxes and consumers pay in sales taxes in their local communities."

Rep. Pascrell's amendment defeated in the Rules Committee along party lines. Below are Rep. Pascrell's remarks (video here) before the Rules Committee today, as prepared.

I am here today to speak in support of my amendment, cosponsored by Ranking Member of the Budget Committee, John Yarmuth, and Ranking Member of the Rules Committee, Louise Slaughter.

My amendment would state that the policy of Congress is that the State and Local Tax Deduction shall be retained.

Taxpayers at every level and in every district benefit from the State and Local Tax (SALT) Deduction, whether directly or indirectly. In 2015, the deduction benefitted more than 44 million taxpayers representing more than 100 million Americans. Nearly 40% of taxpayers with incomes between $50,000 - $75,000 claim SALT, and more than 70% of those making between $100,000 to $200,000 claim it. In higher-cost states like mine and many others, the SALT benefits working- and middle-class families.

This amendment carries more urgency as this budget resolution includes the Capito Amendment, a harmful policy statement that directs the Budget committees to reduce federal deductions for state and local taxes.

If the House is not permitted to vote to protect the SALT deduction, then members who vote for the budget will be expressing their support for a tax increase on hard-working middle-class families to pay for corporate tax cuts.

Groups ranging from the National Association of Realtors to the U.S. Conference of Mayors to the SEIU and AFT to the National Sheriffs’ Association support retaining SALT. They know that double taxing state and local taxes paid leads to cuts to state and local services – a result that would hurt everyone.

The harmful Capito Amendment says the SALT deduction only benefits high-income taxpayers, and Secretary Mnuchin has said we should get out of “subsidizing states.”

But who is subsidizing who? I’ll have you know that New Jersey pays more than $3,717 per person to the federal government OVER what it gets back. And where does that money go? Mississippi gets back $6,495 per person per year from the federal government, West Virginia gets back $6,765 per person, Alabama gets back $6,193 per person per year.

So maybe it is us who are subsidizing these LOW tax states, who can keep their own taxes artificially low because of federal subsidies.

More than 4 in 10 New Jersey taxpayers deduct their state and local income taxes from their returns each year. In New Jersey’s Ninth District, 37 percent of taxpayers claim the deduction with the average amount claimed $18,668 per household.

Please join me in supporting preserving this important deduction for families and communities across our country. I urge you to support my amendment. 

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