Murphy says more SALT needed for NJ taxpayers in light of COVID-19

As New Jersey entered a second month of its first public health crisis, Gov. Phil Murphy said Wednesday that he would continue to push the need in Washington for full SALT deduction relief.

Murphy said he would press the issue not just with New Jersey's congressional delegation, but also with U.S. Senate Minority Leader Chuck Schumer, House Speaker Nancy Pelosi and with the White House.

U.S. Rep. Josh Gottheimer, D-N.J. 5th District, on Tuesday also called on congressional leadership to include reinstatement of the full state and local tax deduction in any forthcoming coronavirus economic relief package.

The SALT deduction allows taxpayers to deduct local tax payments on their federal tax returns. The deduction was capped at $10,000 under President Donald Trump's tax cut law in 2017.

U.S. Rep. Bill Pascrell, D-N.J. 9th District, previously said nearly two-thirds of New Jersey households earning between $75,000 and $100,000 used the SALT deduction in 2017, and the average deduction was around $19,000.

Reinstating SALT would provide New Jersey families with real tax cuts as the state continues to be hit hard by the coronavirus pandemic, Gottheimer said Tuesday.

Gottheimer said he had pushed for direct payments to be regionalized under the recently approved federal stimulus, since we’re a higher cost of living state than say Oklahoma, but “we got the short end of the stick” on that one, as the payments to eligible Americans are a flat amount.

Bipartisan legislation to restore the SALT deduction passed the House in late 2019 but has been stalled in the Senate.

Elsewhere in the country, reaction to potentially eliminating the cap on SALT deductions has been criticized as a break for millionaires, including by Republican Congressman Kevin Brady of Texas.

As reported by the New York Times, a Pelosi spokesman said Monday that she would propose "something narrower than a full SALT rollback [...] tailored to focus on middle-class earners."