Restoration of Local Tax Breaks Illustrates Gottheimer’s Commitment to Working Families

December 20, 2019 by Dan McCue
Restoration of Local Tax Breaks Illustrates Gottheimer’s Commitment to Working Families

WASHINGTON – House Democrats voted to lift a $10,000 limit on state and local tax deductions, known as SALT, repealing a deduction limit Republicans had imposed as part of their 2017 tax code overhaul.

The bill, H.R.5377 , which was enthusiastically backed by Rep. Josh Gottheimer, D-N.J., doubles the SALT deduction limit for married couples on 2019 returns, and will allow them to write off the full cost of state and local taxes when they file their 2020 and 2021 federal returns.

It passed in the House on a mostly partly-line vote of 218-206, after it was amended to prevent households earning more than $100 million from claiming unlimited deductions.

In addition to restoring the deduction for local tax payments, the bill includes two additional tax breaks, including a provision that would double the existing $250 deduction for teachers’ out-of-pocket expenses and create a new $500 deduction for paramedics, firefighters and other first responders.

In the hours leading up to the vote, Gottheimer released a model to illustrate the tax cuts families in his district will effectively receive as a result of the legislation, which is also known as the Restoring Tax Fairness for States and Localities Act.

He estimated that by allowing for the state and local tax deductions, his constituents will save a total $5.6 billion dollars each year.

“Joint filers in tax brackets from $100,000 to $2 million and above will finally get a tax cut from the 2017 Tax Hike Bill that’s slammed our hardworking families with thousands in extra taxes and lower property values,” Gottheimer said.

He noted that the 2017 bill passed when Republicans controlled the House, “has driven residents and jobs out of the Garden State in droves.”

“Ever since I joined Democrats and Republicans in voting against the 2017 Tax Hike Bill, I’ve been fighting to fully reinstate SALT and finally cut taxes for North Jersey families,” Gottheimer said.  “This bill delivers on that … This is a huge win for New Jersey families and businesses.”

Democrats would make up the $184.5 billion drain in federal revenues over the coming decade by increasing the top marginal tax rate for individuals from 37% to 39.6% — the same level that existed before the GOP tax overhaul.

That rate would be permanent, while the SALT cap would return in 2022 under the bill.

Though the bill, like hundreds of other measures passed in the House this year, is unlikely to get anywhere in Republican-controlled Senate, Gottheimer’s full-throated support for it was an illustration of his longstanding commitment to boosting the economic well-being of his district in northern New Jersey. But it was far from an isolated example.

In fact since his election in 2017, he recently told The Well News, “I’ve been fighting to cut taxes and red tape to help businesses of all sizes start and grow, to claw back more of our federal tax dollars from Washington to New Jersey to support our local municipalities, fix our crumbling infrastructure and, above all, lowering taxes for our hardworking families.”

To further those efforts, Gottheimer recently introduced the bipartisan Regulatory Improvement Act, which requires financial regulations be reviewed every seven years to cut red tape, and creates a Regulatory Improvement Commission to take a look at regulations that are outdated or duplicative.

“It’s incredibly expensive to live and do business in New Jersey, and this has caused us to be the number one state in the nation for out-migration to other states,” Gottheimer said. “That’s why I’m focused on finding bipartisan solutions to help people stay here, keep businesses here, and ensure our government works for us.”

Perhaps most refreshing about the congressman’s approach to economic development is its emphasis on supporting small businesses, the kind of mom-and-pop-businesses that are the cornerstones of communities and local downtowns.

In fact, Gottheimer pointed with pride to the fact New Jersey is currently home to 860,000 small businesses.

“That’s 99.6% of all the businesses in the Garden States,” he said. “With numbers like that, it’s clear that small businesses are the bedrock of our local economies and our communities, and it’s imperative that they have our support.”

Gottheimer offered his thoughts during a tough week for dedicated bipartisans like himself, one marked by the impeachment of President Donald Trump. That vote, on Wednesday night, was the capper of a long and divisive year on Capitol Hill.

With this as a backdrop, the congressman was asked how he’s managed to keep above the fray and continue to find partners to work with across the aisle.

“Some members out there seem more focused on getting likes on social media than actually sitting down and working through an issue,” he said.

“I’m out in all the different corners of New Jersey’s Fifth District, talking with people from all walks of life all the time, and I bring that back with me to Washington and sit down with Democrats and Republicans to see where we can come together to take action,” he continued, explaining, “If you want to accomplish anything here that truly helps people, especially given the divided government, you have to work across the aisle to make sure it benefits everyone.”

Reflecting on the divisiveness of 2019 in Washington, Gottheimer said “Despite whatever else might be going on, I represent the hardworking families of New Jersey’s Fifth District, and I will never forget that.

“When I wake up every day, I know that it’s my responsibility to fight for my constituents by working to cut taxes, fix our crumbling infrastructure, lower our health care costs, stand by our first responders and veterans, and ensure residents have the job training and skills they need to continue to put food on the table for their families,” he said. “No matter what else is going on in Washington, I’m never going to let anything get in the way of that.”

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  • Economic Development
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  • red tape
  • SALT
  • small business
  • State and Local Tax Deductions
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