RAMSEY – For Democratic congressmen Bill Pascrell of Paterson and Josh Gottheimer of Wyckoff, it was all about salt Monday morning – both literally and figuratively.

With mounds of salt behind them and much muddy terrain in front of them, Pascrell and Gottheimer used the borough’s salt dome as a prop to announce a full-scale effort in the next Congress to repeal the $10,000 cap on state and local tax deductions. The deductions have become known by the acronym SALT.

The cap on SALT deductions, which begins this tax year, was a key part of the 2017 Republican-inspired federal tax reform bill. It also was a key part of the just-concluded midterm election with Democrats condemning it all over the state.

Only one House Republican from New Jersey supported the federal tax bill. No matter, voters still elected 11 Democrats and only one Republican to represent the state in the new Congress. Pascrell was not far off when he said Republicans got a “thumping” on election day.

Now with Democrats about to take control of the House in January, the lawmakers talked about introducing legislation to eliminate the cap and restore the full, unlimited deduction for state and local taxes.

Such legislation seems certain to pass the House.

But what then?

Republicans still will control the Senate in January; in fact they have increased their numbers by two. So, the GOP will run the Senate by a margin of 53-47 as opposed to the current 51-49.

The overall problem is both political and geographic with both relating to each other.

Capping SALT deductions theoretically effect all taxpayers in the country, but the reality is that in many low-tax states, residents do not pay $10,000 or more in state and local taxes. So, for many Republicans representing these states, the cap is not an issue.

New Jersey is quite different. In a state with the highest property taxes in the nation, many average homeowners pay more than $10,000 in property taxes alone. Add state income taxes and the figure grows some more.

Gottheimer acknowledged some lawmakers in what he calls the “moocher states” delighted in supporting a tax bill that “sticks it” to the northeast states, which are largely Democratic and where income levels are among the highest in the country. Gottheimer uses the “moocher” state designation to describe the many states that on average receive more in federal aid than their residents pay in taxes, New Jersey is just the opposite.

Of course, such name-calling is probably not the best way to get senators from the so-called moocher states to be sympathetic to New Jersey residents with $20,000 property tax bills.

No matter.

Pascrell and Gottheimer were optimistic some GOP senators would go along with eliminating the cap.

Pascrell said Republican senators are feeling heat over this issue as well, noting some residents in “red states” pay more than $10,000 in state and local taxes, meaning that the cap impacts them as well
Gottheimer offered a more basic premise, saying, “I’d like to see them (Republican senators) vote against a tax cut.”

That’s not a bad point, but then again, Pascrell’s argument notwithstanding, most people in the country are not adversely impacted  by the SALT cap.

There’s also the matter of replacing the money produced by the SALT deduction cap if it is eliminated.
Gottheimer said there are “loopholes” in the tax bill that should be closed.

Pascrell said he’d support increasing the corporate tax, which has been lowered by the bill from 35 to 21 percent. He suggested a rate in the area of 25 or so percent.

Gottheimer disagreed, saying he’s against raising any tax.

Clearly, creative props or not, this isn’t going to be easy.