WASHINGTON, DC – Today, Representatives Tom Suozzi, Josh Gottheimer, Mikie Sherrill, Lauren Underwood, Jamie Raskin, Brian Higgins, Tom Malinowski, Bill Pascrell, and Mike Levin were joined by union leaders to make an urgent call on the need to repeal the cap on the State and Local Tax (SALT) Deduction.
Joined by Randi Weingarten, president of the American Federation of Teachers, and representatives from firefighter and teacher unions, the attendees highlighted how the cap has resulted in a tax increase for union families. In high cost of living states like New York, for example, an average family with a firefighter and teacher makes $165,000. In New York, for example, 85.7% of filers who make in between $100,000-$200,000 claimed the SALT deduction for an average of $15, 859. When the cap was repealed, they saw a tax increase of $5,000.
Beyond the SALT cap resulting in a tax increase for the union members, it has also hurt progressive policies by promoting a race to the bottom where wealthy taxpayers are leaving high-cost of living states. When this happens, it results in middle class and low-income families left holding the bag or a cut in funding for vital programs – like the services these union workers provide.
“New York State has one of the highest levels of union membership in the United States. The SALT cap caused union families to see a tax increase,” said Rep. Suozzi. “More Importantly, the cap has accelerated a race to the bottom where wealthy taxpayers flee our state for lower tax jurisdictions that not only have low union membership, but are openly hostile to unions. Now is the time for action. Now is the time for the full repeal of the SALT cap.”
"The 2017 Tax Hike Bill may have lowered taxes in other parts of the country, but, in Northern New Jersey, the average tax bill went up. The $10,000 cap on our State and Local Tax deduction has been a disaster for middle class families and the hard-working men and women of labor — including teachers, law enforcement, building trade members, and firefighters," said Rep. Gottheimer. "We know that when taxes go up, people move out, and it erodes our tax base and makes it harder to support our great schools and emergency services. That's why we're fighting to repeal the cap on the SALT deduction and get more dollars back into the pockets of our families and workforce."
“The impact of the state and local tax deduction cap stretches to every town, county, and borough in my district,” said Rep. Sherrill. “Before it was capped, 55 percent of people in my district took the SALT deduction. That 55 percent of people includes teachers, firefighters, police, nurses, health care workers, and public servants, which means it’s union families that are being hit with this double tax too. With the direct impact it has on my constituents and the way it makes investing in our communities harder, it’s clear that we must address the SALT deduction cap right now.”
“Right now, Congress and the country are debating how to reform our tax code to be fairer, to better serve workers and families instead of corporations and the wealthiest among us. Reforming the SALT deduction cap is vital to this effort, so that middle class families no longer shoulder this unfair burden, and our communities are not punished for investing in essential services. I’ll continue to work with my colleagues in Congress to advance legislation to fix the SALT deduction cap and push for greater tax fairness for the middle class,” said Rep. Underwood.
“When he instituted the first state and local tax deduction at the federal level, President Lincoln said that it made no sense to tax things twice, but that’s what’s happening with this SALT deduction cap,” said Rep. Raskin. “The $10,000 cap imposed by the 2017 tax law has short-changed hardworking middle-class families, including half of all taxpayers in Maryland's 8th District where the average deduction reaches approximately $19,000. I’m glad to be part of the bipartisan group working to change this regressive policy for all the teachers, civil servants, firefighters, engineers and businesspeople who have been hit so hard by this terrible policy change from the 2017 law.”
“Senator Sanders’ budget draft is an important recognition and a step in the right direction. But we need to be thinking big,” said Rep. Pascrell. “We’ve said it before. We may sound like broken record players but it’s important: there can’t be any deal that doesn’t include SALT. Repeat: No SALT, No Deal. None of us standing up for SALT are unreasonable people. We are willing to discuss the specifics. None of us are made of stone. But substantial SALT relief must be a part of a deal, period.”
“The typical family in my state of New Jersey has lost thousands of dollars in tax deductions due to the SALT cap,” said Rep. Malinowski. “It’s time for Congress to stand up for middle class families, fix this injustice, and restore the SALT deduction.”
“Imposing a cap on SALT deductions is an attack on hard-working Americans in South Jersey and across the country,” said Rep. Norcross. “America’s middle-class families need relief and do not deserve to be unfairly punished when they file their taxes – but that is just what the SALT deduction cap does. It targets our teachers, our first responders, union members and all the hard-working families in our communities. We must put this money back in their pockets, and I’ll continue fighting to make sure that New Jerseyans don’t face these burdensome caps in the future.”
"The SALT cap is a one-two punch to the middle class. Not only does it shift an unfair tax burden from millionaires onto nurses, educators, and public employees—the very people who got us through the brunt of this pandemic—but it also punishes communities that had the compassion and forethought to invest in public services,” said Randi Weingarten, President of the American Federation of Teachers. “Repealing the SALT cap gives the American middle class access to the opportunities that help them thrive. Congress needs to repeal the SALT cap before it causes even more financial pain for working families who cannot handle another blow. "
“In these unprecedented times, the cap on state and local tax deductions puts significant stress on fire and EMS department budgets, and arbitrarily raises taxes on middle-class workers, like fire fighters,” said Edward Kelly, General President, International Association of Fire Fighters. “Any Member of Congress who supports their local fire departments, local schools, and the hard working women and men who serve their communities every day, even in the midst of a pandemic, should stand up in support of repealing the SALT cap. I thank Representative Suozzi and the assembled Representatives for their support in this important endeavor.”
“Our members are not just law enforcement officers whose jobs are supported by state and local revenues, they are also tax paying citizens themselves, living in the communities they serve. The fact is that the capping of the SALT deduction is a significant tax increase for many homeowners, including law enforcement officers. Prior to being capped, the SALT deduction made homes more affordable for working class Americans, like law enforcement officers. Since the cap has been in place, officers and their families have found it more difficult to afford their homes, and this also makes it harder for our officers to stay and live in the communities they serve. The cap must be repealed – for our communities and for the officers who work every day to keep our communities safe. NAPO urges Congress to pass the SALT Deductibility Act, introduced by Representative Suozzi and supported by over 100 bipartisan cosponsors, to repeal the $10,000 cap on SALT deductions put in place by the Tax Cuts and Jobs Act of 2017,” said Bill Johnson, Executive Director, National Association of Police Organizations
In addition to having support from many national unions, other outside organizations that support the repeal of the SALT cap include:
- US Conference of Mayors
- National Association of Counties
- National League of Cities
- National Association of Realtors
- National Education Association
- National Association of Police Organizations