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“As it now stands, the SALT deduction is a direct financial hit on many families living in New Jersey, where state income taxes and local property taxes are higher than many other parts of the country,” the mayor said. “As a matter of fairness, it is time to increase the cap – since New Jersey residents pay more into the federal budget.”
The $10,000 cap is set to expire at year's end, leaving the White House and members of Congress to determine the next steps.
Since 1913, the SALT deduction allowed U.S. taxpayers to deduct what is paid in state income and local property taxes before computing federal taxes — thus helping Monroe residents avoid double taxation.
That unfortunately changed in 2017, capping SALT deductions at $10,000 each year.
“This is not considered an issue only for wealthy New Jersey taxpayers,” Mayor Dalina explained. “In Monroe, this is squarely a middle-class issue. If SALT was restored, nearly a third of New Jersey residents – about three million people – would get tax relief. It has been widely reported that about 80% of them have incomes of less than $216,000 annually.”
Prior to 2017, the average SALT deduction taken in New Jersey was $19,000, nearly double the current cap. According to the Treasury Department, the SALT cap has prevented more than 11 million Americans from deducting more than $300 billion in state and local taxes since its inception.
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