NJ House lawmakers hope for late negotiations with White House to maintain SALT

On the eve of the House Ways and Means Committee releasing its tax reform bill, White House officials are expected to huddle with House Republicans from New Jersey on Wednesday in hopes of reaching an agreement on whether the coveted state and local tax deduction (SALT) will remain in the plan, FOX Business has learned.

Four of the five lawmakers from New Jersey are planning to join a phone conference with National Economic Director Gary Cohn and Treasury Secretary Steven Mnuchin at 8:30 p.m. ET in the hopes that they can come to a solution in the ongoing debate on whether part, if not all, of the SALT deductions will be included in the bill, details of which will be rolled out Thursday.

The four New Jersey lawmakers who will likely be on the call are Reps. Tom MacArthur, Leonard Lance, Chris Smith and Rodney Frelinghuysen, sources familiar with this discussion said. Rep. Frank LoBiondo (R-N.J.) will not attend due to a scheduling conflict, aides close to him said.

A White House spokeswoman did not return calls for comment. Spokespersons for all of the lawmakers did not return emails for comment.

The call could be a major turning point going into what could be a historic day for President Donald Trump’s administration as they look for votes that could put the final bill across the finish line. House members who represent constituents who would be most impacted by the loss of the SALT deduction, primarily those who reside in New York, New Jersey and California have openly voiced their concerns over the legislation.

Going into the discussion, lawmakers from New Jersey are split on whether they would support a partial eradication of the SALT deduction, which would include the elimination of the income tax deduction while maintaining the property tax deduction.

According to the Tax Foundation, 35.7% of New Jersey tax filers claim their property tax deduction, and it represents 4.1% of their adjusted gross income, the most in the U.S. Further, according to Wallethub, a credit card and tax research site, New Jersey residents whose home value is over $179,000 gets hit with an average property tax of $4,189 annually.

While New Jersey has some of the highest property taxes in the country, the GOP tax reform bill may include a limit on how much someone can deduct from their property tax claim, with the cap ranging from anywhere between $10,000 to $15,000 in deductions, according to those familiar with the matter.

Three of the four New Jersey lawmakers scheduled to talk with Cohn and Mnuchin were part of the larger group of 20 representatives who voted against the House budget, which is a blueprint for tax reform—the budget eventually passed by the slim margin of 216 to 212. Their no votes for the budget makes it even more imperative that the White House and Republican leadership try to find a way to flip them to yes as some New York Republicans are already threatening to vote no if the SALT deduction is not included in the final bill.

The conversation represents the second call in a week between White House officials and cagey Republican lawmakers. FOX Business first reported on Monday that Mnuchin and Cohn spoke with House Representatives from New York and, but senior White House officials faltered on assurances to provide a solution to the SALT debate.

SALT affects about 30% of all taxpayers, mainly in the states of New York, New Jersey, California, Connecticut, Virginia and Pennsylvania that impose significant state income and property taxes. The Republican-controlled Congress is dominated by lawmakers from southern and western states that don’t impose such levies. They have argued for ditching the SALT deduction from the tax code on the grounds that it unfairly benefits taxpayers from just a handful of states and deprives the federal government of trillions in revenue.