SALT Deductions
Floor Speech
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Mr. GOTTHEIMER. Madam Speaker, we are here today representing tens of thousands of middle-class families, like those back in my home district in northern New Jersey, who got whacked with the 2017 tax hike bill, which gutted our State and local tax deduction with the disastrous $10,000 cap.
It is high time that Congress and the rest of the country heard just how badly these hardworking families have been hurt by the SALT cap. It is something I know we heard about a lot tonight, and I really want to thank my dear friend Tom Suozzi for his excellent leadership on this issue.
The usual naysayers continue to try to undermine our efforts to reinstate the State and local tax deduction, or SALT, by claiming it is just a giveaway to the wealthiest Americans. But anyone who actually lives in my district in northern New Jersey knows that the $10,000 cap has hit middle-class families hard, many of whom are already struggling with high costs.
It has also caused residents and jobs to leave our State. And now, with a declining tax base, it's threatening our best-in-class schools, teachers, law enforcement, firefighters, and our State's services for hard-pressed families.
The cap on the State and local tax deduction does not solely impact the highest earners. It has also increased taxes on scores of middle- class families, as I said. It is a very important point to understand.
In Bergen County, which is the largest county I represent, for instance, before the cap was put in place, the average SALT deduction was above $24,000 a year. Put another way, a married couple in Bergen County, a teacher and a law enforcement officer making a typical salary, could have had a SALT deduction of more than $17,000.
According to reporting from New Jersey's Star-Ledger, if we reinstated the State and local tax deduction, nearly one-third of New Jersey residents, almost 3 million people, would get tax relief. Yes, they would get a tax cut they so desperately need. As many as 80 percent of them had incomes of $216,000 or less.
Again, that is a firefighter and a teacher. That is hardly the 1 percent, especially in a high-cost-of-living area like New Jersey. I know the same thing is true of California, like we heard about from Katie Porter, or Tom Suozzi's district in New York.
We know that when taxes goes up, it leads to an exodus of middle class and higher earners in State likes ours. In fact, according to United Van Lines, ever since the SALT cap, New Jersey has been the number one out-migration State in the entire country. New Jersey is losing its highest earners, and the disproportionate taxes they pay, to States like Florida, North Carolina, and Texas. That has only been exacerbated during the pandemic.
The SALT cap is literally draining the tax base out of States like New Jersey that offer far better schools and government-supported services to middle- and lower-income families than our counterparts in other parts of the Nation.
For instance, I mentioned $15,000 is the median property tax in Bergen County, New Jersey. If you go to Mississippi, their median property tax is $550 a year.
The New York Times editorial board even once reiterated this point that I am trying to make, where we have good services for hard-pressed families in States like mine and other State I mentioned, like Mississippi or Alabama, don't have the resources to offer those kinds of services.
So The New York Times editorial board made this point when they said that States like New Jersey and New York ``generally do a better job of providing for the health and welfare of their citizens, and are more willing to pay for institutions that are good for society as a whole.''
This is the difference between States like ours and moocher States like Mississippi and Alabama that tend not to give back to the people they represent.
Thankfully, there is real bipartisan work taking place here in Congress to reinstate the SALT deduction, to get more money back in the pockets of Jersey middle-class families, and to help stop residents from moving out and eroding our State's tax base.
Along with Congressman Suozzi, I have helped introduce the SALT Deductibility Act, a bipartisan bill to fully restore the deduction.
In the SALT Caucus, with Congressman Bill Pascrell, who spoke earlier, we are working in a bipartisan way with more than 30 Members to find a way to get this done in Congress and to actually get tax relief for the middle-class families we represent. I am very proud to co-chair that bipartisan caucus.
This tax cut of reinstating SALT can be a win-win for everyone. Let's get the SALT deduction fully reinstated so that millions of Americans and families nationwide can finally get some relief.
Working together in a bipartisan way, I believe we really can get this done so that our best days are always ahead of us.
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Mr. GOTTHEIMER. Madam Speaker, I would be happy to.
One of the biggest challenges people don't realize for States like New Jersey, New York, Connecticut, and California is how much our taxpayers pay into the Federal Government and, historically, how we get back less in return than some of the other States in the country do.
For instance, for every dollar that Mississippi sends to the Federal Government, they get $4.38 back. Alabama, I believe, receives $4.32 back. The State of Louisiana starts its budget every year with half coming from the Federal Government.
States like Jersey, we get back 67 cents, historically, on the dollar.
What does that mean? It means that we pay lots of money to Washington. People like me are fighting to claw more back to Jersey, but we know that other States benefit more.
When the tax hike bill passed in 2017, and the red States gutted the State and local tax deduction, capping it at $10,000, what they did was shift actually even more of the tax burden over to blue States like ours, and the red States benefited even more.
It just reiterates, even more, the importance of actually reinstating the State and local tax deduction, not only because, as Katie Porter said, it is double taxation and not only because it has been around since 1913 or even before for exactly this purpose. It is because we recognize that some States pay more than others, and we have to find ways to balance that out. Otherwise, we are going to keep losing people from States like ours to States like Florida and other red States.
Frankly, that is why it is so important that we fight back to get tax relief for the people that we represent, to make sure they can afford to live in our States and that we have a good tax base to be able to have great schools and stand by law enforcement, firefighters, and others.
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Mr. GOTTHEIMER. Madam Speaker, I thank Congressman Suozzi for putting together this Special Order hour.
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