Gottheimer, Pascrell, Ramsey Mayor Launch Fight to Reinstate SALT

Nov 19, 2018
Press

Above: Congressman Gottheimer and Pascrell stand up for SALT in front of salt. Right to left: Ramsey Mayor Deirdre Dillon, Congressmen Bill Pascrell, Josh Gottheimer, Councilmen Joseph Verdone, and Michael Gutwetter

Today, U.S. Congressmen Josh Gottheimer (NJ-5) and Bill Pascrell (NJ-9) officially launched their bipartisan fight to reinstate the SALT deduction in the new 116th Congress, joined by Ramsey Mayor Deirdre Dillon and members of the Ramsey Borough Council. At the Ramsey salt depot, the Congressmen discussed how the midterm elections represented a revolt the size of the salt pile behind them.

Ramsey recently passed a resolution urging Congress to fully reinstate the SALT deduction. In Bergen County, the average taxpayer claimed $24,783 in State and Local Taxes.

“Congressman Pascrell and I are here this morning for a simple reason: to officially launch our fight in the new Congress to reinstate the SALT deduction, so we can stop double taxation, actually cut taxes for northern New Jersey, to kill the New Jersey-targeted political games coming out of the IRS, and prevent more people and business from moving out of Jersey to the Moocher States.” Congressman Josh Gottheimer (NJ-5) said, “Voters on both sides of the aisle said ‘we got crushed by this federal tax hike bill and we’ve had enough.’ The salt pile behind us represents the magnitude of that revolt. The 39 candidates that flipped seats on Election Night, that gave Democrats the majority, were fiscally responsible moderates. Those who believe, like I do, that we need to make life more affordable for people. We need to cut taxes at every level, including here in New Jersey.”

“The State and Local Tax deduction enriches our communities by allowing state and local governments to provide needed services like roads, police and teachers. Middle Class New Jersey families have used them for years to help afford college tuition payments, medical bills, and family vacations. And this year, Republicans stole them. They stole them to give some tax cuts to their donor class and big business friends,” said Congressman Bill Pascrell (NJ-9), New Jersey’s only member of the tax-writing House Ways and Means Committee. “I was a vocal critic of the GOP Tax Scam as it made its way through that committee. I offered amendments to restore the SALT deduction that were voted down on party lines. With a new guard in Washington, a better day is coming. Both through the Ways and Means Committee and legislation, I will be fighting tooth and nail to see the SALT deduction restored for New Jersey. We won’t rest until our taxpayers get their money back and are made whole again.”

Video of the announcement can be found HERE.

Congressman Gottheimer’s remarks as prepared for delivery are below:

Congressman Pascrell and I are here this morning for a simple reason: to officially launch our fight in the new Congress to reinstate the SALT deduction, so we can stop double taxation, actually cut taxes for northern New Jersey, to kill the New Jersey-targeted political games coming out of the IRS, and prevent more people and business from moving out of Jersey to the Moocher States.

If you look at the map, and add up the numbers, there were few things clearer on Election Night: the states that got stuck with paying the bill for the Federal Tax Hike Bill last year – the states where gutting SALT had the biggest impact on their pocketbooks – states like this one — revolted. In New York, California, New Jersey, the epicenter of the federal Tax Hike Bill, the people spoke loud and clear: we need to cut taxes, not raise them. They insisted need higher property values, not actions that gut them and send our people packing. They declared are sick and tired of paying the bill for the Moocher States.

Voters on both sides of the aisle said “we got crushed by this federal tax hike bill and we’ve had enough.” The salt pile behind us represents the magnitude of that revolt.

Pointedly, the candidates that flipped seats on Election Night, the 39 that gave Democrats the majority, were fiscally responsible moderates. Those who believe, like I do, that we need to make life more affordable for people. We need to cut taxes at every level, including here in New Jersey. We need to cut red tape. And we need to focus on bringing more jobs and more economic growth to New Jersey.

When Congress gutted SALT, and capped it out at $10,000, it sharply limited New Jersey’s property tax deductions, eliminating interest deductions for home equity lines, and imposing a massive Tax Hike on Jersey families and businesses. It’s basically a seven percent tax increase on many of the residents in my district. According to Moody’s, it’s going to slow growth and decrease property values in New Jersey by 10%.

It’s time to stick it back to them. It’s time to cut taxes here. In the new Congress, Congressman Pascrell and I, along with others, including Republicans, will fight back, tooth and nail. The IRS wants to politicize this fight. It’s time for actual tax cuts for Jersey families, homeowners and businesses.

According to recently released IRS data, the federal Tax Hike Bill sent our taxes up in northern New Jersey. All four counties that I represent – Bergen, Passaic, Sussex and Warren, pay an average state and local tax amount that exceeds the new $10,000 cap.

Here in Bergen County, the average taxpayer claimed $24,783 in State and Local Taxes – more than half of which is now subject to double taxation under the new law. That means higher taxes for these residents. What’s the impact of these higher taxes?

Here in Jersey, we are experience some of the worst outmigration in the country – 67% – that means that net more people are leaving New Jersey than are coming into New Jersey. Ours is the worst in the country.

The New Jersey Business and Industry Association estimates that New Jersey has lost $21 billion in adjusted gross income since 2004 just from people leaving the state. That’s 87,000 jobs, $13 billion in lost economic activity, and $4.6 billion in lost labor income.

Our realtors will tell you that they are getting flooded with calls from people whose kids are off to college looking to sell their home and move to Florida. More and more of our residents are spending six months and a day elsewhere.

The folks and businesses leaving all tell me the same thing: they love our schools and safe neighborhoods. They love the shore and proximity to the city. But they just can’t afford to live here anymore. They can’t handle the crumbling infrastructure and endless commutes. And the Moocher States, that we prop up, which got a great deal in the Tax Hike Bill, are now even less expensive. That’s why their governors are literally targeting our businesses, running ads, and writing op-eds in our newspapers to steal our people and jobs.

Before the federal Tax Hike Bill passed, states like Mississippi were already getting $4.38 for every dollar they send, compared to 33 cents that we historically send. We’ve been literally subsidizing other states – their roads, their bridges, their fire departments, all at the cost of helping our own. And all at the cost of our property taxes. Yet, the Moochers weren’t satisfied — they went in for more.

They took, and took, and expected to keep taking from our wallets. They aren’t even hiding it anymore. That’s why If you live in Florida or North Carolina, you loved this tax bill. You got a great deal – and those of us in New Jersey paid for it. There’s a reason why every Democrat and Republican in the New Jersey congressional delegation voted against the Tax Hike except one.

Last December, on the day of the vote, a Moocher State congressman looked at me and gleefully announced “Today is the day we get to stick it to the Northeast!”

So, to our Moocher States, here’s what we plan to do to fight back, because as my grandfather always told me – you must complain with a solution.

First, we will introduce legislation to fully reinstate the SALT deduction. This legislation will be a top priority in the new Congress. Ramsey, to their credit, has already passed a resolution asking Congress to reinstate the deduction for the new Congress.

Second, I will reintroduce Anti-Moocher legislation, so that residents in states like ours, that pay more, get a tax credit to help even things out. It’s ridiculous that we keep footing the bill and get nothing for it.

Third, we will fight the policizied IRS and their attempt to stop New Jersey’s new charitable tax deduction. This is an idea I’ve been advocating for, along with many mayors in my District, for a year now.

This tax deduction helps eliminate the new federal tax increase – and actually cut our taxes in Jersey – by utilizing the same kind of deduction that’s already being used in 33 other states for decades now, including South Carolina, Georgia, and Alabama – red states – to save their taxpayers money.

Ramsey is one of many towns looking at how they can provide relief from the new SALT cap. It’s going to take a fight – and they’re here to join in.

Here’s how the Tax Cut Plan works: Towns continue to invest in everything its residents needed – from police to schools to streets – by setting up a town charitable general fund. For those who make charitable contributions to that new fund, the town can now give tax credits to their residents on their property tax bills of up to 90 percent of their property tax bill.

And when you make this charitable contribution and itemize your taxes – like more than half of the Fifth District does – you could take a deduction on your federal taxes, even if you fall under the AMT.

Last month, Treasury and the IRS ­­– who for decades now had allowed these charitable funds and given a thumbs up – decided to change their minds, and proposed a regulation that would eliminate this tax cut for families.

It’s disgusting how overtly political this new regulation by the IRS feels – a bureaucratic overreach to double down on the tax hikes slapped on New Jersey residents. This is just a cynical attempt by the IRS and the Treasury Department to deliver on their own political ends to “stick it to the Northeast.” That’s why I wrote to IRS Commissioner Charles Rettig­– to demand him to reverse course on this new IRS regulation and let New Jersey residents actually lower their taxes.

And I was hardly the only one to raise a red flag. Colleagues of ours from Georgia and other states – all Republicans – also wrote a letter to Commissioner Rettig and Treasury Secretary Mnuchin to rail against the fallout that this regulation would have on their state’s utilization of charitable deduction funds.

In their own words, “Our offices have heard from parents, educators, school officials, and rural hospital workers about how the recently proposed rule would put a number of Georgia’s tax credit programs…in a peculiar situation.”

I am proud to join with my colleagues from Georgia, and the Ramsey council with us today, to ask the IRS to reverse course on this new bureaucratic regulation and tax increase.

Finally, let me just say that it didn’t have to be this way. We didn’t have to be in front of this SALT depot. We could have done a real tax cut in the first place because I believe all hardworking Americans deserve a tax cut. Back in December, Congress Leonard Lance and I unveiled a bipartisan fix to save the State and Local Tax Deduction, cut taxes for New Jersey families and businesses, and reduce the deficit. But ultimately, the Moocher States felt the need to stick it to us instead, and we were overruled. It’s a new day and a new opportunity for a real tax cut for New Jersey.

This month’s election was also a call for more moderate middle of the road policies that are good for the northeast, not just a few red states.

It’s time for both sides to work together – Democrats and Republicans – and pass common sense legislation. To fix SALT and cut taxes – and bureaucracy – while fighting to keep and bring new jobs to Jersey. To fix our roads, bridges and tunnels – and keep our air and water clean. To get health care premiums downs and make prescription drugs more affordable. To stand by our vets and first responders. To do what’s best for our districts – for Jersey – not some national political party. That’s what I will continue to focus on as Co-Chair of the bipartisan Problem Solvers Caucus, it’s what the voters just told us in this last election, and what I hope others will join me in doing, too.

We are blessed to live in beautiful, safe communities like this one, in a state we all love so much. If we work together, I know that, in the greatest country in the world, our best days will always be ahead of us.

Thank you, God bless you, and may God continue to bless the United States of America.

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