New Jersey lawmakers press for SALT cap repeal in next relief package

New Jersey lawmakers press for SALT cap repeal in next relief package
© Greg Nash

New Jersey's House members are urging the Biden administration and congressional leaders to include repeal of the cap on the state and local tax (SALT) deduction in the next coronavirus relief bill.

"Relief from the unfair and destructive SALT cap offers the precise breed of action our constituents, states, and localities will benefit from immediately," the lawmakers wrote in letters Wednesday to Treasury Secretary Janet YellenJanet YellenYellen says Biden's COVID-19 relief bill 'acted like a vaccine for the American economy' On the Money — Yellen highlights wealth gap in MLK speech Yellen: US has 'much more work' to close racial wealth gap MORE and to House Speaker Nancy PelosiNancy PelosiHouse has the power to subpoena its members — but does it have the will? Man who threatened to kill Ocasio-Cortez, Pelosi pleads guilty to federal charges The Hill's 12:30 Report: Dems look to repackage BBB into salvageable bill MORE (D-Calif.) and Senate Majority Leader Charles SchumerChuck SchumerVoting rights failed in the Senate — where do we go from here? Forced deadline spurs drastic tactic in Congress Democrats call on Biden administration to ease entry to US for at-risk Afghans MORE (D-N.Y.).

Every House member from New Jersey signed the letters, including the delegation's two Republican members: Reps. Chris SmithChristopher (Chris) Henry SmithLawmakers seek 'assurances' Olympic uniforms not linked to forced labor Biden signs bill punishing China for Uyghur abuses Last living Nuremberg Trials prosecutor deserves Congressional Gold Medal MORE and Jeff Van DrewJeff Van DrewDemocrats gain edge from New Jersey Redistricting Commission-approved maps Lawmakers who bucked their parties on the T infrastructure bill Republicans hit Biden over Afghanistan, with eye on midterms MORE. Rep. Josh GottheimerJoshua (Josh) GottheimerRedistricting reform key to achieving the bipartisanship Americans claim to want Democrats gain edge from New Jersey Redistricting Commission-approved maps Progressives look to regroup after Build Back Better blowup MORE (D-N.J.) highlighted the letters at an event in the state Wednesday.

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Former President TrumpDonald TrumpHeadaches intensify for Democrats in Florida Stormy Daniels set to testify against former lawyer Avenatti in fraud trial Cheney challenger wins Wyoming Republican activists' straw poll MORE's 2017 tax-cut law created a $10,000 cap on the SALT deduction. Most GOP lawmakers support the cap and have highlighted studies showing that repealing it would primarily benefit high-income households. But politicians in high-tax states such as New Jersey, New York and California have been highly critical of the SALT deduction cap, arguing that it hurts their residents as well as their states' ability to provide robust services to residents.

The New Jersey House members said in their letter that government employment has declined since the pandemic began and that the job losses are concentrated in areas such as education. They also said that many of the states that have been hit hardest by the pandemic are those that send more money to the federal government than they receive.

"Removing the SALT cap would be a textbook method to provide relief to communities ravaged by the pandemic," the lawmakers wrote.

House Democrats last year passed two coronavirus relief bills that included the temporary repeal of the SALT deduction cap, but those bills were not taken up by the Senate. Repeal of the deduction cap was not included in the $1.9 trillion relief package that Biden proposed earlier this month.

During her confirmation hearing last week, Yellen said that before making a decision about the SALT deduction cap, Treasury should study the impact of the cap on state and local governments.