Gov. Phil Murphy speaks during a news conference in Ewing, N.J. | Getty Images

Gov. Phil Murphy. | Getty Images

Murphy urges Pelosi to eliminate SALT cap through coronavirus relief package

New Jersey Gov. Phil Murphy said Tuesday that he has urged Speaker Nancy Pelosi to push for an elimination of the cap on state and local tax deductions as part of any forthcoming stimulus package.

“As we continue to think about a Main Street stimulus, Congress should undo the SALT deduction cap to help New Jersey’s middle class homeowners,” Murphy said during his daily coronavirus press briefing, adding that he specifically urged Pelosi over the course of two conversations on Monday to lift the cap.

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Since taking office in 2018, Murphy, a progressive who chairs the Democratic Governors Association, has repeatedly pushed for Congress to eliminate the SALT cap — an element of the 2017 federal tax law that imposed a $10,000 cap on state and local deductions.

The cap disproportionately affects residents of New Jersey, New York and other high-tax states. Last year, New Jersey, New York and Connecticut sued the Trump administration, challenging Internal Revenue Service rules that outlaw certain workarounds to the cap on state and local tax deductions.

Shortly after Murphy’s comments on Tuesday, Rep. Josh Gottheimer (D-N.J.) released a statement calling on “leadership to include in the next coronavirus relief package a full reinstatement of our SALT deduction, to get real tax cuts to help rescue Jersey families from this health and economic crisis.”

At his press briefing, Murphy specifically thanked Gottheimer and Rep. Bill Pascrell (D-N.J.) for pushing for an elimination of the SALT cap as Congress navigates its coronavirus response.

Murphy, along with New York Gov. Andrew Cuomo, Connecticut Gov. Ned Lamont and Pennsylvania Gov. Tom Wolf, previously sought a $100 billion relief package for Northeast states that so far have been hit hardest by the virus.

While Murphy was generally complimentary of the $2 trillion stimulus signed by President Donald Trump last week, he has also said it didn’t go far enough.

The next stimulus package should include dedicated aid for workers and businesses hurt by the pandemic as well as “flexible aid for states who’ve borne the brunt of this virus,” Murphy said. “New Jersey and New Jerseyans who are in the eye of the storm should not be treated the same way as states less impacted by this invisible enemy.”

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