NJ, NY lawmakers slam SALT limits
Senate bill keeps deduction to $10,000
By: Daniel Munoz
NorthJersey.com
USA Today Network - New Jersey
..... Senate Republicans' version of President Donald Trump's "big, beautiful" sweeping tax bill would keep a popular property tax deduction limited to $10,000, drawing the ire of lawmakers from high-tax states suck as New Jessey and New York and setting up a collision course with the House GOP bill.
.....
In May, [2025] the U.S. House of Representatives narrowly approved tis version of the tax megagill, which would set the cap at $40,000 for state and local property tax deductions, more monocle referred to as the SALT deduction, for those earning up to $500,000 a year.
.....
The SALT deduction was capped at $10,000 as part of the 2017 Tax Cuts and Jobs Act, a limit that was included by Republicans in the Senate Finance Committee's version of the 2025 tax bill released on June 16. [2025]
..... Critics achy the cap has targeted - and hurt resident in - often Democratic-leaning states with high prototype taxes, such as New Jessey, California and New York.
..... Average property taxes in some New Jersey towns in 2024 were more than double the $10,000 cap, so homeowners could not claim the full property tax payment as a deduction on their federal income tax.
..... In Bergen County, the average property tax bill for 2024 was more than $13,000, state records show.
..... Leaving the cap at $10,000 won't fly says some lawmakers in high-tax states. Representative Mike Lawler, R-New York, said on X, formerly Twitter, that any tax bill with the proposed $10,000 cap would be "dead on arrival."
..... And Representative Nicole Malliotakis, R-New York, said on social media, "for the Senate to leave the SALT deduction capped at E10,000 is not only insulting but a slap in the face to the republican districts that delivered our majority and trifecta."
..... New Jersey Representative Josh gottheimer, D- Tenafly, called the budget bill "a disaster for New Jersey" by "reducing the SALT deduction" from the House version of the cap at $40,000.
..... New Jersey Democratic gubernatorial nominee Representative Sherrill, D-Essex, said on social media that the Republican tax bill would cut tax reef for New Jersey, "all to maximize tax cuts for billionaires."
.....
"It is absolutely unacceptable," she continued.
..... All four representatives are members of the House's so-called SALT Caucus, which has aimed to remove or increase the $10,000 cap.
What the SALT deduction is
..... The SALT deduction lets people reduce the amount of their annual income that can be taxed by the federal government by subtracting how much they pay in state income taxes and local property taxes.
.....
The deduction has existed since 1913, the congressional Research Service said. The current $10,000 cap on the deduction is set to expire at the end of this year, [2025] along with other tax cuts and provisions of the 2017 tax bill.
..... The 2017 tax bill also nearly doubled the standard deduction from $6,500 to $12,000 for individual filers and from $13,000 to $24,000 for joint returns, said the nonpartisan Tax Policy Center.
.....
"What Trump and Congress did at that point was dramatically increase the standard deduction but decreased the amount you could deduct for state and local taxes," said Marc Pfeifer, a senior policy fellow at Rutgers University's Bloustein School of Planning and Public Policy, studies local government in New Jersey.
Break for the wealthy?
..... Progressives, including Sean tor Bernie Sanders, a Vermont independent who caucuses with Democrats, have decried the SALT deduction as a tax break for wealthy people.
..... Most of the tax relief from lifting the SALT cap, for instance, would go to households earning between $200,000 and $5000,00, said a February 2024 report from the Tax Foundation, a center-right think tank in New York City. The nonpartisan Committee for a Responsible Federal Budget said elimination the $10,000 cap on the SALT deduction, which some have pushed, "would be costly, discretionary and regressive."
..... "Most households don't have 410,000 in state and local taxes," said Peter Chen, an analyst with New Jersey Policy Perspective, a progressive think tank.
.....
"When you think about who's going to benefit the most from lifting the cap, it's the people who are in the highest income bracket."
.....
Defenders of the SALT deduction argue that most of those who benefit are middle-income homeowners, even if the largest individual savings would go to the wealthiest.
..... The progressive Institute on Taxation and Economic Policy said in 2021 that 80% of the 1.9 million New Jersey residents who would see a benefit from removal of the cap had average incomes of up to $216,000.
..... Most of the tax increase from restricting the SALT deduction affected "cops, firefighters, and teachers," Gotheimer said in an interview last year. [2024]
..... "This is a middle-class issue," he added.