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Garbarino Leads Letter to Congressional Leadership Calling For SALT Deduction To Be Restored

July 27, 2021

WASHINGTON, D.C. –  Today, Congressman Andrew Garbarino (NY-02) led a letter, along with his colleagues U.S. Representatives Mike Garcia (CA-25), Nicole Malliotakis (NY-11), Michelle Steel (CA-48), Lee Zeldin (NY-01), Young Kim (CA-39), and Jefferson Van Drew (NJ-02), to Congressional leadership calling for the immediate repeal of the State and Local Tax (SALT) deduction cap. The letter was also shared with President Biden and the White House.

"Many of our constituents, including teachers, first responders, and members of law enforcement earn incomes that are higher than many with the same jobs in other parts of the country, but these incomes make them middle class in the high cost of living communities we represent," the letter reads. "We welcome you, and all our colleagues, to visit our home districts and meet the real people being penalized and financially harmed by the cap.

"Anyone who takes us up on the invitation will meet hardworking, middle class Americans who are paying some of the highest property taxes in the country. These are taxpayers who contribute mightily to their communities, are seeking to recover economically from the crushing effects of the pandemic, and yet are still being unfairly burdened by a shortsighted tax policy."

The full letter to can be viewed here.

 

Dear Congressional Leaders,

The weight and burden placed upon a great many of our constituents by the imbalanced features of the unreasonable $10,000 cap on the State and Local Tax (SALT) deduction must be addressed by this current Congress. The Tax Cuts and Jobs Act included many provisions that simplified the federal tax code and decreased the overall tax burden for many Americans. However, due to the unfair and counterproductive provision imposing the SALT cap, our constituents have benefited less from the law than individuals and families in other areas of the country because the law did not consider regional differences in income across the United States, and instead it has imposed a de facto double tax on hardworking taxpayers in communities across the country.

The initial purpose of the SALT deduction, when it was first implemented more than a century and a half ago, was to prevent imposing federal taxes on top of state and local taxes already paid. Putting the cap in place ensures that taxpayers who reside in already high taxed states, such as New York and California, are effectively taxed on a portion of income that was never available to that taxpayer. Additionally, the cap on the SALT deduction has incentivized taxpayers from high taxed states to flee these areas, costing state and local governments valuable tax revenues. Clearly, the purpose of the full SALT deduction is still apparent, and the incentive provided by the deduction will truly benefit a significant portion of the taxpaying population.

According to 2017 IRS data, the SALT deduction cap disproportionally affects hardworking families in high taxed states:

  • The average SALT deduction for families in 4 states (California, Connecticut, New Jersey, New York) was over $20,000.
  • The SALT Deduction is over 7% of Adjusted Gross Income (AGI) for families in California, Connecticut, Maryland, New York, New Jersey, Oregon, and DC.
  • Over 40% of filers claimed SALT deductions in Connecticut, New Jersey, Maryland, and DC.
  • Just 3 states (California, New York, and New Jersey) combined to pay for over 40% of all SALT deductions nationwide.

Many of our constituents, including teachers, first responders, and members of law enforcement earn incomes that are higher than many with the same jobs in other parts of the country, but these incomes make them middle class in the high cost of living communities we represent. We welcome you, and all our colleagues, to visit our home districts and meet the real people being penalized and financially harmed by the cap.

Anyone who takes us up on the invitation will meet hardworking, middle class Americans who are paying some of the highest property taxes in the country. These are taxpayers who contribute mightily to their communities, are seeking to recover economically from the crushing effects of the pandemic, and yet are still being unfairly burdened by a shortsighted tax policy.

We ask that you consider restoring the balance and fairness of the tax code by repealing the SALT deduction cap. Imposing the cap wasn’t fair in 2017, and it is still being proven to be unfair as it financially harms so many in our communities. It is time that we as lawmakers bring common sense and balance back to our tax code.

Thank you for your attention to our urgent request and for your consideration to work toward a solution that will help the many Americans being hurt by the $10,000 cap on the SALT deduction. We look forward to working with you all as we seek bipartisan solutions to the many challenges that face our nation.

Respectfully,

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