A bipartisan pair of New Jersey congressmen are fighting to preserve the state and local property tax deductions in the Republican tax overhaul package.
Only a select few members of the House and Senate have official seats at the negotiating table as the two chambers attempt to merge their competing tax proposals. Even though they don’t have formal seats at the table, New Jersey Republican Leonard Lance and Democrat Josh Gottheimer are floating a plan that would do away with the $10,000 cap on property tax deductions that’s in both tax bills.
Capping property tax deductions is unacceptable, Gottheimer said.
“It’s a tax hike for people in our states and my district, people who are deeply concerned. They worry about their property value going down, 15 to 20 percent,” he said. “They worry about suddenly having their taxes go up and how they are going to pay for things.”
Gottheimer, who said he supports lowering taxes, said he might back the bill if congressional leaders included the proposal for preserving state and local tax deductions, known as SALT. That could pave the way for more legislators from the Northeast to get on board.
“I think the reaction we’ve got is incredibly positive — unsurprisingly, I think, from SALT states,” he said. “But also you’re seeing that it’s one of these bipartisan efforts, it has nothing to do with party label, but where you are from.”
U.S. Rep. Tom MacArthur, the sole supporter of the bill from the Garden State, said the cap on deductions is needed in order to raise enough revenue to afford other tax cuts in the legislation. For example, the overhaul calls for repealing the Alternative Minimum Tax (AMT), which affects a lot of New Jersey families. The AMT sets a floor for how much taxpayers have to send to Washington even if they have sizable deductions.
Still, Lance said he won’t give up.
“I have advocated consistently for retention of the deductibility of state and local taxes, and I hope that the conference will consider it,” he said. “Certainly, we should fight to the last moment.”