A New Jersey Congressman is looking to roughly double the cap on state and local tax deductions to $80,800 for married couples, in a bid to secure more savings for residents in high-tax states.
Representative Josh Gottheimer, a Democrat from New Jersey, unveiled a plan that would lift the cap from its current level around $40,000 — the ceiling for both single and married filers. He has dubbed the legislation The Tax Cuts Not Penalties for Married Couples Act.
"If you file jointly you should get double the tax deduction," Gottheimer said on Tuesday, standing outside of an H&R Block in Fort Lee, New Jersey. While the proposal wouldn't eliminate the cap entirely, it "fixes something right now that makes obvious sense to fix."
The SALT deduction was a key point of negotiation during the crafting of a must-pass tax bill last year. Raising the cap was supported by both Republicans and Democrats who represent districts in high-tax states like New York, New Jersey and California. The break is especially lucrative in those areas due to high property values and local taxes.
Gottheimer, a co-chair of the bipartisan SALT caucus, presented his proposal days after Congressman Nick LaLota, a Republican from Long Island, said he aims to reopen negotiations to expand the benefit if Congress attempts to pass a second tax bill before the midterm elections.
Congressional Republicans are planning a fast-track spending package that can sidestep a Senate Democratic filibuster by using special procedural rules. Senate Majority Leader John Thune has indicated he prefers to keep the legislation tightly centered on securing several years of funding for immigration enforcement and border security. However, other lawmakers have considered adding additional priorities.
Gottheimer said the upcoming legislation is the "perfect vehicle" to push for more deductions. Though, any changes face obstacles. A majority of Republicans oppose additional SALT relief, which they see primarily benefiting high tax, Democratic-led states, and the fast-track package is unlikely to attract Democratic support.
