06/25/2019 | Press release | Distributed by Public on 06/25/2019 16:08
WASHINGTON - Today, Tuesday, June 25, 2019, U.S. Congressman Josh Gottheimer (NJ-5) testified before the House Ways and Means Committee to fight for the reinstatement of the single most important issue for the Fifth District of New Jersey: the State and Local Tax (SALT) deduction.
Gottheimer noted that the Tax Hike Bill had a devastating impact on the Fifth District, which gutted the SALT deduction, sharply limited New Jersey's property tax deductions and imposed a massive tax hike on Jersey's families and businesses.
'It's clear that Democrats and Republicans are feeling the pain. The SALT cap has been nothing but a disaster for the Fifth District of New Jersey' said Congressman Josh Gottheimer (NJ-5). 'Our families and our businesses simply can't afford tax increases at any level.'
Gottheimer added, 'Of course, none of this would be necessary if we simply repealed the SALT cap. That's why I'm working on bipartisan legislation with my Republican colleague from New York Congressman Lee Zeldin, and others, that will fully reinstate SALT, end double taxation, help create jobs, and cut taxes for Jersey, without raising any other individual or business rates. It's time for both sides to work together - Democrats and Republicans - to get this done. It's just common sense.'
Gottheimer has introduced a bipartisan Joint Resolution in the House of Representatives, along with Congressman Peter King (NY-2) to fully repeal the Treasury Department's massive regulatory overreach that prohibits states like New Jersey and New York from allowing towns and municipalities to use charitable funds to offer real tax relief to their communities.
With the finalization of this new rule, the Treasury Department and the Internal Revenue Service (IRS), without any legislative basis and against both legal precedent and decades of previous IRS approval, are unfairly picking winners and losers, while targeting states like New Jersey and New York.
View the video of the testimony here.
Congressman Gottheimer's remarks as prepared for delivery are below:
Chairman Thompson, Ranking Member Smith, and members of the Committee, the great Congressman Bill Pascrell from the great state of Jersey. Thank you for your leadership, Mr. Pascrell. Thank you for holding this critical Member Day hearing on the single most important issue in the Fifth District of New Jersey: the State and Local Tax Deduction, also known as SALT.
Last Congress, a double taxation grenade was lobbed at New Jersey and other high-tax states by the moocher states in a partisan, federal Tax Hike Bill. The Red States made out like bandits and got a bunch of tax relief for themselves - and we in Jersey paid for it with tax hikes.
In fact, the only way they footed the bill was to gut the State and Local Tax Deduction, capping it at $10,000 -- imposing a massive Tax Hike on Jersey families and businesses. They literally took more than $668 billion dollars out of our pockets in the SALT states for their tax relief in the Moocher states.
Gutting SALT has had a real impact on districts like mine in northern New Jersey. I'm in the Fifth District. Bill is right next door. All four counties I represent had an average SALT claim above the $10,000 cap. In Warren County, the average deduction was $12,588. In Sussex County, the average taxpayer claimed $14,267. In Passaic County, the average deduction was $14,714. And finally, 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. Something we've never believed in - double taxation. But here you go above the $10,000 cap - whacking us.
In April, we saw new polling out of New Jersey, that showed families think they are overtaxed. Nearly 60% of New Jersey CPAs advised their clients to leave the state because of the higher taxes. A Rutgers-Eagleton poll found that 79 percent of New Jerseyans complained about higher property taxes.
Beyond higher taxes for way too many Jersey families, millennials and businesses are moving out - citing higher taxes and crumbling infrastructure. Twice as many people moved out of New Jersey in 2018 as moved in. The number one state in the nation for outmigration now. Again, citing tax hikes as the biggest problem. Not exactly something you put on a bumper sticker.
Higher taxes are stifling economic growth for our region and decreasing property values, which are already falling. It's why we must cut taxes. According to Moody's, because of the SALT cap, property values in New Jersey will be down by more than ten percent. A recent Zillow study drew a similar conclusion - since the Tax Hike Bill, home values in low-SALT states are rising much faster than in states like ours.
I could continue to go on and on, but what's clear is that Democrats and Republicans are feeling the pain. The SALT cap has been nothing but a disaster for the Fifth District of New Jersey.
That's why I worked with the State of New Jersey on a bipartisan Tax Cut Plan to blunt the impact of the SALT cap. What we're trying to do is actually what 33 other states have been doing for decades - utilizing the charitable tax deduction. This way, towns could set up funds to give people in my district property tax relief. I did it with Congressman Bill Pascrell, the Governor, and he later signed it into law.
Yet just two weeks ago, the IRS finalized rules nullifying the Tax Cut Plan, despite that 33 other states are utilizing it. Congress didn't give the IRS permission to interpret the tax law as they see fit. It's incredibly clear that this massive regulatory overreach is aimed at whacking blue states like New Jersey and all of our hardworking, taxpaying families.
I have heard from cities and towns across the Fifth District that this IRS regulatory overreach is stopping them from being able to provide actual tax relief for their residents. That's why I introduced a bipartisan resolution last week that aims to provide much needed certainty and, once and for all, gives people the tax cuts they need and deserve. Our families and our businesses simply can't afford tax increases at any level.
Of course, none of this would be necessary if we simply repealed the SALT cap. That's why I'm working on bipartisan legislation with my Republican colleague from New York Congressman Lee Zeldin, and others, that will fully reinstate SALT, end double taxation, help create jobs, and cut taxes for Jersey, without raising any other individual or business rates.
It's time for both sides to work together - Democrats and Republicans - to get this done. It's just common sense.
And I kindly ask the Committee for help in getting this done. Thank you for your excellent leadership and for having me here today. I'm grateful. Thank you.