A $ 3.5 trillion spending bill on health care, childcare, education and climate change will also address the $ 10,000 cap on state and local income and wealth taxes, a key senator said Wednesday.
US Senator Robert Menendez, a member of the Senate Finance Committee on taxation who will help draft the spending bill, said the move will address the deduction known as SALT.
“To the best of my knowledge, there is a SALT deployment that would provide relief,” Menendez told NJ Advance Media.
The trigger is unlikely to be fully restored immediately, as it would cost $ 673 billion over ten years, according to the conservative research group Tax Foundation.
But raising the deduction cap by thousands of dollars would benefit middle-class homeowners who have been hit hard by the regime, including those in New Jersey, which has the highest property taxes in the country.
Menendez said the details have yet to be worked out.
The agreed spending bill is significantly lower than the original budget resolution of $ 6 trillion, which included $ 120 billion to deal with the impact of the Republican tax law cap of $ 10,000.
Governor Phil Murphy, one of several governors and mayors who met with President Joe Biden at the White House on Wednesday, welcomed the news that state and local tax withholding will be part of the legislation.
“This is something we pounded on,” Murphy told NJ Advance Media after the meeting. “We have to raise this ceiling.”
The draft budget would be passed through reconciliation, a process that would allow majority approval and prevent a Republican filibuster in the Senate.
In the same way, Democrats in Congress passed their $ 1.9 trillion coronavirus spending bill, and Republicans in Congress approved their tax cut.
With just 50 senators, the Democrats cannot afford deserters, which admits supporters of abolishing excessive bargaining power.
“President Trump screwed the state of New Jersey. and hurt New Jersey middle class taxpayers and we’ll see if we can restore that, ”said US Senator Cory Booker. “I’ll be one of those people who fight and insist, push and work.”
The Institute on Taxation and Economic Policy, an advanced research group, said 80% of New Jersey’s 1.9 million residents who would benefit from the cap lifting had an average income of $ 216,000 or less, despite 72% of the benefits the richest would go 5%.
The spending measure in question is separate from a bipartisan infrastructure bill of $ 579 billion in an agreement between Biden and a group of Democratic and Republican Senators.
“The only way to do this is to have two lanes,” Biden said at the beginning of the meeting.
Both laws were discussed in the White House on Wednesday.
“There are no democratic roads or republican bridges,” said Biden. “I think we are in good shape. We have an agreement.”
Murphy said bipartisanism was the order of the day, with governors and mayors from both parties at the meeting.
“Infrastructure has historically been one of, if not the most non-partisan, political agenda item,” he said at a press conference with the other participants on the White House grounds. “There’s no reason we can’t recapture this”
“There’s nothing like doing a few runs on the board to prove you can and building from there.”
Even if Republicans reject the $ 3.5 trillion proposal, Murphy said both bills should go into effect.
“This is one and / or both of the moments,” he said. “New Jersey is the densest state in America, a big winner when it comes to infrastructure. We’re already doing childcare, pre-K, community college, big affordable housing plans, but we could use a lot more federal funding. “
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Jonathan D. Salant can be reached at jsalant@njadvancemedia.com. Follow him at @JDSalant.
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