SALT plan would lift cap to $30K
GOP tax proposal faces bipartisan opposition
By: Daniel Munoz
NorthJersey.com
USA Today Network - New Jersey
..... The Republican tax plan in the U.S. House would raise the cap for the state and local property tax deduction from the current $10,0000 to $30,000 for families making up to $000,000.
.....
That's according to legislation released May 12 [2025] by the Republican-led House Ways and Means Committee. It's a nonstarter with representatives in the House's so-called "SALT Caucus," who have campaigned for years to repeal completely the limit on the deduction for federal income taxes.
..... "we're negotiated in good faith on SALT from the start, fighting for the taxpayers," reads a joint statement from New York Representatives Mike Lawler, Elise Stefanik, Andrew Garbarino and Nick LaLota, all Republicans. "Yet with no notice or agreement, the speaker and the House Ways and Means Committee unilaterally proposed a flat $30,000 SALT cap - an amount they already knew would fall short of earning our support," the statement
reads. "It's not just insulting - it risks derailing President Trump's One big Beautiful Bill."
..... The committee is scheduled to debate and vote on the bill on May 13 [2025] at 2:30 PM.
..... North Jersey Democratic Representative Mikie Sherrill, who is running for governor, could not immediately be reached for comment.
..... Representative Josh Gotheimer, also a candidate for governor, said the proposal "just doesn't cut it."
..... "This will only drive more Jersey families out of the state because it's just too expensive," he said in an emailed statement. "Our families deserve a real tax cut, not some sham proposal."
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Gottheimer previously said he wanted a full repeal of the cap. Sherrill said in March [2025] that she thawed the deduction for married couples filing jointly.
..... The University of Pennsylvania's Wharton School projected a $134 billion price tag for such a proposal.
..... New Jersey's congressional Republicans have also proposed raising, but not repealing, the cap.
..... The GOP proposal would cut taxes and extend President Donald Trump's 2017 tax cuts due to expire this year. [2025] to pay for that, they would tighten classic safety net benefits for the poor, Reuters Reported.
..... House Speaker Mike Johnson wants the bill to be passed before Memorial Day Weekend. [05/24-26/2025]
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.
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The current $10,000 cap on the deduction was set as part of the 2017 tax law and is set to expire at the end of this year, [2025] along with oth4er tax cuts and provisions.
..... Critics of the cap say it has disproportionately harmed Democratic-leaning states with high state income and property taxes, including New Jersey, New York, Connecticut and California.
..... A proposal to increase the cap form $10,000 to$30,000 would cost the U.S. government between $22 billion and $197 billion over a 10-year period, the Wharton School said. That assumes the $20,000 deduction is limited to married filers making up to $500,000 a year.
Some towns' taxes top $20,000
..... New Jersey's average property tax bill broke past $10,000 in 2024, according to figures from the state Department of Community Affairs.
.....
Here is the breakdown of the average property taxes bill across North Jersey's counties for 2024:
* Bergen County: $13,329.
* Essex County: $13,900.
* Morris County: $11,278.
* Passaic County: $8,693.
* Sussex County: $8,693.
.....
The average property tax bill in some New Jersey towns in 2024 was more than double the $10,000 SALT deduction limit, including Demarest at $24,736, Montclair at $21,631 and Tenafly at $23,833.
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But even just doubling the cap from $10,000 to $20,000 would "be inclusive to a lot more places," said Marc Pfeiffer, a senior policy fellow at Rutgers University's bloust4ein School of Planning and Pubic Policy, who studies local government in New Jersey.
..... Progressives, including Senator Bernie Sanders, a Vermont independent who caucuses with Democrats, have decried the SALT deduction as a tax break for the wealthy.
..... Most of the tax relief form lifting the SALT cap, for instance, would go to households earning between $200,000 and $500,000, said a February 2024 report form the Tax Foundation, a center right think tank in New York city.
..... The nonpartisan Committee for a Responsible Federal budget said the proposed repeal of the $10,000 SALT cap "would be costly, discretionary, and regressive."
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"Most households don't have $10,000 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 form removal of the cap had average incomes of up to $216,000.
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Most of the tax increase from restricting the SALT deduction affected "cops, firefighters and teachers," Gottheimer said in an interview last ear. [2024]
..... "This is a middle-class issue,' he added.