Rep. Mikie Sherrill Talks SALT, Taxes With Livingston Old Guard

LIVINGSTON, NJ — Rep. Mikie Sherrill’s ongoing push to lift an unpopular property tax change for homeowners – at least those in New Jersey – continued earlier this week when she met with the Livingston Old Guard.

Sherrill spoke with the guard’s members during a virtual meeting, offering an update on the attempt to “address the SALT deduction cap that is unfairly double taxing seniors” in the Garden State, including Livingston.

The congresswoman has been a vocal critic of the Trump-era changes to the state and local tax (SALT) deduction. In an April letter to U.S. Treasury Secretary Janet Yellen, Sherrill highlighted the importance of the SALT deduction to homeowners in New Jersey, which routinely tops lists of the highest property taxes in the nation.

Backed by several other Democratic Party peers, Sherrill pushed for the inclusion of a provision to address the cap in the recent federal infrastructure package. She wrote:

“As the Biden administration and Congressional leadership begin the process of drafting a tax and infrastructure package to drive our long-term economic recovery from the COVID-19 pandemic, we write to thank you for your recent commitment to work with members of Congress to remedy the state and local tax (SALT) deduction cap that has had such a disproportionate impact on residents of our states. For our constituents and millions of taxpayers throughout the country, the SALT deduction cap has imposed a harmful double tax and has created one of the largest marriage penalties in the federal tax code. We could not vote for a bill that has a meaningful tax impact on our constituents unless it restores SALT deduction relief to our middle-class families.

“Millions of Americans, already reeling from the economic consequences of the pandemic, will now be hit by a significant increase in federal taxes compared to what they faced before the deduction cap was introduced. As our economy recovers from this public health and economic crisis, it is critical that we provide our constituents and state and local governments with the relief that they desperately need. We believe that the upcoming tax and infrastructure package would be an ideal piece of legislation from which to deliver meaningful SALT reform to our communities.

“There is a misconception that the SALT deduction doesn’t help middle class families who need relief, instead only helping the well-off. However, in high cost of living areas, SALT does in fact make a critical difference in helping make ends meet for our middle class. From teachers to law enforcement officers, many of our constituents depend on this deduction to afford the high cost of living in their area. Those are the constituents who need this relief the most, and we are committed to fighting for them.

“Let us be clear, the Republican 2017 tax bill placed this undue double tax on the very residents across the country who live in states and communities that have already invested in key progressive priorities including well-funded public education, adequate pay and benefits for public servants like teachers and first-responders, climate resilient infrastructure for the next generation, and key environmental protections and climate conscious policies to name a few.

“Our states and communities have made the investments that the federal government, and especially the previous administration, has historically failed to make. This cap unduly punishes them for it.

“According to the Tax Foundation, before the 2017 tax bill, thirty percent of Americans itemized their taxes, and of that ninety-five percent of itemizers took the SALT deduction. In February 2019, the Treasury Department estimated that almost 11 million Americans would no longer be able to deduct over $300 billion in state and local taxes as a result of the SALT deduction cap. This significant tax increase means that billions of dollars are not being spent in our economy to support our small businesses and keep workers employed. Furthermore, current SALT rules mean that married couples have their SALT deduction cut in half relative to two individual filers. At a time when families are struggling and we are trying to direct needed relief to parents, it makes no sense to impose an extra tax on married couples, many of whom have children.

“In high cost of living states and regions, the SALT deduction cap has also increased the movement of higher-income taxpayers to other states. The loss of this tax base has stuck lower- and middle-income taxpayers with the bill for essential services such as education, law enforcement, and infrastructure, and has weakened the ability of our state and local governments to fund these vital investments. The SALT deduction cap will make it more difficult for our state and local governments to finance the long-term investments that are crucial to equitable growth, and could lead to a ‘race-to-the-bottom’ of spending cuts to our school systems, public transit, and public sector workforce.”

• See related article: Livingston-Based Accountant Helps Write SALT Workaround Law

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