Rep. Kim Op-Ed: Fix the SALT Deduction
As published in the Asbury Park Press
Monday is Tax Day, and if you’re one of the millions across our state who have already filed, you’ve seen that you can’t deduct as much as you used to.
You didn’t do anything wrong, but Congress did. The previous Congress rammed through a massive tax overhaul that was a costly wolf in sheep’s clothing. Disguised as a middle-class tax cut, you are seeing the results of gutting the state and local tax, or SALT deduction, first-hand. Millions across our state have gone from receiving refunds to paying more at a time when New Jersey families already pay more than their fair share.
If you’ve lived in New Jersey your entire life, you know that not a year goes by without the issue of taxes coming up. Year after year, we see reports that we’re one of only a few states to send more of our taxpayer money to Washington than we get back in services. In fact, a report from earlier this year showed that New Jersey residents only get 82 cents back for every dollar paid in federal taxes.
Just recently I asked people in my district, comprising parts of Burlington and Ocean counties, which issues were most important to them. Of the more than 1,100 people that responded, more than 50 percent said that state and local tax issues were top of mind.
When you look at the impact of the previous Congress’ tax bill on New Jersey families, it’s easy to understand why. According to the Federal Reserve Board, four in 10 Americans are unprepared to cover an emergency expense of $400. If you are one of those families, and suddenly lose your tax refund, a bill from the IRS can simply cripple you financially. No working family should have to decide between food on the table or a roof over their heads because of an unfair tax bill that they didn’t want and didn’t ask for.
The SALT deduction isn’t something new, but a fundamental principle of the American tax code. From the brain of Alexander Hamilton to the core of the federal income tax legislation at the beginning of the 20th century, this deduction prevents taxpayers from being taxed twice on the same dollar by allowing them to write off taxes paid at the state and local level from their federal taxes.
This deduction doesn’t just help families avoid double taxation, it helps build cities through infrastructure investment, it provides for communities through social service investment and it prepares the next generation through education investment.
New Jersey has been hit particularly hard by this tax law. In 2016, nearly 2 million New Jersey taxpayers deducted their property and state income taxes. These working families averaged $18,000 per deduction. That means that they paid $8,000 more on average than they’re now allowed to deduct from their taxes.
Earlier this year, I was joined by a bipartisan coalition from the House and Senate to introduce the Stop Attacks on Local Taxpayers or SALT Act. This bill would restore the full deduction for families and bring tax fairness back to the system. Congressional leaders on both sides of the aisle should bring this bill forward for a vote to give our families a chance for relief.
We have a chance now to work together to fix this problem and to make sure that by this time next year, we spare New Jersey taxpayers the shock of a surprise bill and replace it with the peace of mind and economic security they deserve.