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Rep. Josh Gottheimer (D-Wyckoff). (Photo: Kevin Sanders for the New Jersey Globe)

Gottheimer asks Yellen to restore SALT cap workaround

By Nikita Biryukov, January 26 2021 12:19 pm

Rep. Josh Gottheimer (D-Wyckoff) called on President Joe Biden’s newly confirmed treasury secretary to reinstate an ill-fated workaround to the $10,000 cap on state and local tax deductions Tuesday.

“It is imperative that we work together to get our tax policy right and cut taxes for hard-working Americans as we continue to fight this pandemic,” Gottheimer said in a letter to Janet Yellen. “Given the level of need in this country, we should be trying to encourage charitable giving as much as possible to help those that need additional help.”

The program at issue is one that would allow residents to pay local and state taxes through donations to pass-through non-profits and deduct those payments from their federal tax bill.

A rule enacted by President Donald Trump’s administration blocked the workaround. New Jersey and other wealthy, high-tax blue states are disproportionately impacted by the cap on state and local tax deductions.

Gottheimer argued the workaround was needed to uplift non-profits struggling amidst the pandemic-fueled economic downturn.

“There are widespread news reports that charities are still having difficulties contending with the ongoing COVID-19 pandemic, as the ensuing economic recession has simultaneously suppressed charitable giving while raising the community’s need for these organizations,” he said.

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