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Republican congressional candidate Frank Pallotta. (Photo: Pallotta for Congress).

Republican congressional candidates say Dem incumbents failed on SALT

Gottheimer, Sherrill, Malinowski pen letter pushing for future SALT reform

By Joey Fox, August 17 2022 11:34 am

Last fall, a cohort of New Jersey congressional Democrats had a clear message on reconciliation negotiations: “No SALT, no deal,” referring to the state and local tax deduction cap that has impacted their suburban districts.

Reps. Mikie Sherrill (D-Montclair), Tom Malinowski (D-Ringoes), and Josh Gottheimer (D-Wyckoff), among others, said that if a reconciliation bill made changes to the tax code that affected families in their districts, it needed to alleviate the SALT cap as well. But all three voted for the Inflation Reduction Act (IRA) that President Joe Biden signed yesterday despite a lack of SALT provisions, and the Republicans running in their districts are on the offensive.

“In 2018, then-candidate Mikie Sherrill ran on ensuring uncapped SALT deductions,” 11th district Republican nominee Paul DeGroot said earlier this month, as the deal was being finalized. “Now she supports whatever Pelosi tells her to do.”

“Hypocrite Josh Gottheimer is caving to Nancy Pelosi, reversing his pledge to only vote for an economic bill that eliminates the SALT cap,” echoed 5th district Republican nominee Frank Pallotta.

According to data from 2016, Sherrill’s and Malinowski’s current districts had the nation’s 2nd- and 3rd-highest rates of tax returns with a SALT deduction that year, respectively, while Gottheimer’s district had the 8th-highest. All three incumbents are running in redrawn districts this year, but their new districts likely remain very SALT-dependent.

Gottheimer and Sherrill have both defended their votes on the IRA by saying that the bill does not raise taxes on families in their districts; the changes to the tax code the bill makes are focused on corporate tax rates. The pair also joined Malinowski and Reps. Tom Suozzi (D-NY) and Katie Porter (D-CA) in a letter to House Ways and Means Chair Richard Neal (D-MA) pushing for future action on the SALT cap.

“It remains essential that we end the double taxation of our constituents that the red states and the extreme-right imposed in their tax hike of 2017,” they wrote. “We strongly urge you to include our proposal for restoring SALT in any tax extender package that your committee takes up this year.”

Ironically, that letter has also turned into an attack line on someone who didn’t sign it: Rep. Andy Kim (D-Moorestown), who has pushed for lifting the SALT cap but who has never been a die-hard member of the “no SALT, no deal” group.

“Where’s Congressman Kim?” Kim’s Republican opponent, Bob Healey Jr., said in a statement released today. “As some of his New Jersey Democrat colleagues fight to reinstate the SALT deduction, Congressman Kim is ‘Missing-In-Action.’”

The effectiveness of the Republican attacks depends in part on how long voters’ memories are. Democrats may have failed to eliminate the SALT deduction cap this year, but it was Republicans who implemented it in the first place with the passage of the Tax Cuts and Jobs Act in 2017.

New Jersey Republicans were largely united in opposition to the bill over its impact on New Jerseyans’ already-high taxes; of the state’s five Republican members of Congress at the time, only one, Rep. Tom MacArthur (R-Toms River), voted for it.

“I had hoped to be able to vote for a pro-growth tax bill,” former Rep. Rodney Frelinghuysen (R-Harding), who retired in 2018 and was succeeded by Sherrill, said after the passage of the TCJA. “However, H.R. 1 forces New Jersey residents to pay for tax cuts for residents in other states. I voted ‘No’!”

Still, although New Jersey Republicans aren’t always on board with the national Republican agenda on SALT, future SALT cap reform is more likely under a Democratic-controlled Congress than a Republican-controlled one. That’s a reality that many Jersey voters may recognize, even after Democrats’ failure to lift the cap via the IRA.

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