New Jersey Senator Bob Menendez, a senior member of the Senate Finance Committee that sets national tax policy, joined Senator Bernie Sanders, chairman of the Senate Budget Committee, to discuss their joint proposal to repeal the cap on state and local tax (SALT) deductions for middle-class families. The senators’ plan would limit the universe of taxpayers who would benefit from this deduction to provide permanent relief and ensure the relief is targeted towards hardworking families.
“It has always been my view that the SALT deduction should benefit hardworking families. Recent proposals that provide a temporary reprieve in exchange for an extension of the $10,000 cap are a bait and switch. They won’t benefit families struggling to pay for property taxes, but they will benefit the millionaires and billionaires who see this as a windfall to avoid paying their fair share,” said Sen. Menendez. “We are convinced any SALT relief should be targeted to the families that need it most. And we are optimistic we can reach an agreement soon to solve this issue without going against President Biden’s pledge on not raising taxes to families making under $400K a year.”
The senators say that a tax law passed under the Trump administration and “rammed through the Republican-controlled Congress on a party-line vote” unfairly gave huge tax breaks to the super rich and giant corporations while simultaneously hiking taxes on the middle class and capping SALT deduction at $10,000.
The SALT deduction allows taxpayers to write-off taxes paid at the state and local level from their federal income tax bill. The SALT deduction supports the ability of communities, cities, and states to raise their own revenues and fund critical investments in public education, infrastructure, social services, and public safety.