ENGLEWOOD, NJ – Gathered on the front lawn of an Englewood resident feeling the pain of high taxes, four members of New Jersey’s congressional delegation joined with Englewood Mayor Michael Wildes to let the country know that unless the SALT (State And Local Tax) deductions were reinstated as part of the upcoming budget reconciliation, they would not vote for it. Congressman Bill Pascrell, John Gottheimer, Mikie Sherrill, and Tom Malinowski each spoke about the necessity of undoing the 2017 revocation of SALT.
Mayor Wildes described Englewood as a city of trees and the bedroom community of Wall Street, a city which had also been hard hit by the effects of Ida. “We are very concerned about the future of our children and grandchildren. We have a vested interest in the older turning their keys over to the younger generation and it has changed our community. We cannot get taxed out and this bedroom community to Wall Street is at great risk if people can’t live affordably. As we see immigrants migrate to the south and pass over New Jersey, people will not stay here if they cannot afford to do so.”
The homeowner, Gerald Greif, a personal friend of Wildes, told the officials that Bergen County was experiencing an exodus of residents to cheaper places and that unless something could be done, more and more would leave the state. “Each year we haven’t had SALT in place hurts our pockets and we keep losing people in the city to other states with lesser tax burdens than we have here. I know some friends who are looking to move because it is too expensive with tax rates in Bergen County and other areas. I hope the members of congress will help get our tax breaks back which will help greatly.”
Pascrell spoke, using the fieriest rhetoric of all the members of congress. “The average property owner in Bergen County pays $24,000 in taxes. We are here to fight for the average American. When the clowns who have objected to what we’ve said from the beginning, as Josh would say, many of them are from moocher states. They live off of us. We pay some of the highest federal taxes as a state in the entire country. We’re here to talk business.” Pascrell said that the 2017 tax cuts were for Republican donors. “We’re taking the gloves off, I’m telling you.”
Pascrell thanked the mayors of Demarest, Englewood, and Assemblyman Johnson for coming. “We are here to put a human face on why we are fighting for the SALT restoration,” Pascrell said. “For generations, the SALT deduction has been a lifeline for communities like Englewood.” The congressman said that the SALT deduction had been in existence for decades and that states needed to be able to fund their own public services. “When I talk to police, firefighters, and educators, I like to talk to them about taxes. I like to set the record straight. They are paying thousands more in taxes because they cannot deduct it on their federal income tax beyond $10,000. They never talked about raising the taxes for these people when they have this ‘great tax cut’ in 2017. Remember that? They tried to throw a hoax on the American people that they would cut their taxes and we know where most of the money went in those cuts. I didn’t make that up, look at the numbers.”
Continuing, Pascrell asked who would benefit more than the aforementioned groups he described? “Not only can teachers use their deductions, police officers can no longer get their taxes back. Towns would have money to fix the roads, hospitals, and schools and help the local taxpayer.” Describing the 2017 tax cuts as a “disaster” Pascrell said that the long history of SALT deductions should be regarded as a baseline for discussions going forward.
“In 2017, the Republicans stole SALT away from us,” Pascrell charged. “Twelve main states were hit. There are other people in every other state who apply for this deduction on federal income tax day. They stole SALT from us, in New Jersey, which pays some of the highest taxes in the country and they bragged about it! Look at their own words. The SALT cap they created came from malice and nowhere else!”
Pascrell said that, with respect to Biden’s Build Back Better plan, the Democrats would have the budget fully funded. “We are having tax reform in this legislation which we did not have in 2017.” Pascrell said that while the Republicans “cut your taxes” rather than being rewarded, “they got blown out of office in 2018! That was their reward because they lied to the American people… That marathon of four days in a room doing the budget was not pleasant. I was angry about that. [Republicans] lied so much I could barely sit still, you could imagine in this room, going over this budget, listening to this crap they threw at us in 2017 like this was the best thing next to a cancer cure.”
The veteran congressman said, “Restoring SALT is restoring the middle class. And their arguments against Biden’s legislation was saying how important it is that the police, firemen, and teachers are protected—the very people they screwed in 2017. In 2017, 42% of new Jersey taxpayers, about two million people, deducted their state and local taxes, averaging over $19,000 per household. ‘This is for the rich and lucrative’—that’s their anthem which has no words. More than 81% of those who deducted SALT earned less than $200,000.”
Pascrell said that the police, fire, and teachers unions support restoring SALT deductions because their members have seen how the caps harm their members. On the floor of the House, Pascrell said he voted to repeal the SALT cap twice, where it was carried through the lower chamber. “The House has done its job, the McConnell Senate killed the legislation both times. What do they have against New Jersey? There is no Build Back Better and no rebuilt America without a restored SALT deduction. Period.” Pascrell then held up a letter from the International Association of Firefighters from September 13, supporting the restoration of the SALT deductions.
“I’m honored to be here with these other three congressmen,” the Representative of the 9th district said. They’ve been to the battle. Pascrell has worn his helmet.”
“We have two clear messages,” Gottheimer said. The first was to keep New Jersey residents in the state, and that jobs and communities make the state affordable. “Number Two: we are here to reiterate our clear position. We will only vote for a reconciliation package on the House floor that reinstates the SALT deduction. As I have said for months, no SALT, no dice.”
Gottheimer described SALT has an “existential threat” to New Jersey because while residents may love their state, “they are looking for some relief. By reinstating the SALT deduction, we can bring their taxes down and allow moms and dads to once again deduct their state and local taxes. This is a fight back against the Moocher States and what the Red States did to us in 2017 when they gutted the SALT deduction with a disastrous $10,000 cap. This has a major negative impact across every one of our districts.” Gottheimer said before the cap, Bergen County had an average SALT deduction over $20,000 a year. “Their taxes went up after the 2017 tax bill, not down.” Gottheimer described his congressional companions as a “SALT Strike Team” which was fighting back. “We are now the number 1 out-migration state in the country and those who call New Jersey home are increasingly struggling to pay their bills.” He warned that the exodus would also take away the talent and industrious residents the state needs. “As a point of comparison, in Alabama, the average tax rate is $580 a year. Try offering what we do in New Jersey for $580 a year. You couldn’t do it.”
“If we reinstated the SALT deduction,” Gottheimer said, “the average saving per taxpayer would be $2,090, it would also be a 1.7% increase in disposable income. Nearly a third of New Jersey residents would get tax relief.”
Mikie Sherrill spoke next, saying, “I’m proud to stand alongside my colleagues today and make it clear that we’re fighting for SALT relief for New Jersey families. This is an issue that impacts teachers, firefighters, first responders, and everyday working families in my district.”
Sherrill said that repealing the SALT deduction cap has been a “top priority” of hers since her election in 2018, a year after the 2017 tax bill was passed. “We finally have an opportunity to deliver. Repealing the SALT deduction cap is a must-do and it is clear that there’s no pathway forward on the Build Back Better Act without it.” Sherrill said that the SALT cap was “a punishment” for New Jerseyans and that 54% of residents in CD 11 had taken the SALT deduction in the past. She also thanked Senator Bob Menendez for his support in the upper chamber.
Malinowski offered his support, echoing his fellow members of congress, saying, “Any budget reconciliation bill that is going to raise the top individual tax rate for my constituents must also address the SALT deduction.” He said that the budget reconciliation was “historic” and represented enormous opportunities to effect necessary changes, including bringing funding to the state and local levels for the fight against the effects of climate change. The deduction, however, has to be included. “We cannot vote unless SALT is restored. Bottom line.”
Congressman Gottheimer’s statement that he and his allies would not vote for the reconciliation budget without SALT reinstated had parallels to his “line in the sand” on the bipartisan infrastructure bill. On Tuesday, August 24, Gottheimer’s Glen Rock office was visited by dozens of protestors as well as supporters when the CD 5 congressman made it clear he and his bipartisan problem solvers caucus wanted the bipartisan infrastructure bill voted on before the budget reconciliation. For a short time everything looked to be hanging in the balance given the fairly slim Democratic House majority, but, in the end, Pelosi yielded rather than risk a rift. This left Gottheimer able to run a victory lap and all-but-assured the passage of both massive pieces of legislation. That is, of course, provided that the SALT deduction is written into the reconciliation.
Once again, Gottheimer has found himself in a position to leverage what he and his allies Pascrell, Sherrill, and Malinowski believe is critical for Garden State homeowners. They know full well that the president’s budget reconciliation is a political-must to get passed and they are confident that it will. To do so would represent a significant victory for New Jersey Democrats in the House, Gottheimer in particular, as well as those feeling the pain in their pockets each time the taxes come due.