Menendez Highlights Importance of Salt Deductions in Reducing the Racial Wealth Gap

Press Release

U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Banking, Housing and Urban Affairs Committee, today highlighted the importance of state and local tax (SALT) deductions in reducing the racial wealth gap at a full committee hearing entitled "Priced Out: The State of Housing in America." Sen. Menendez pointed out how high property tax assessments are

an additional burden on homeowners, specifically amongst middle and low-income families, and often in minority communities.

"Higher property tax rates inflict a double penalty on homeowners: higher property tax rates lead to lower home values, making Black and Hispanic homeowners more vulnerable to tax foreclosures and tax sales," said Sen. Menendez. "This is by design. Being taxed more for less limits the ability to build wealth through homeownership. Annual over-assessment eats away at Black and Hispanic homeowners' income and wealth, yearly. And, when their neighborhoods become gentrified, their property values suddenly and rapidly increase--leaving them vulnerable to foreclosures, liens, and sales, if they are unable to pay their increased property tax bills."

The Senator then emphasized the effects of Republican efforts to limit SALT deductions, which was rammed through the Republican-controlled Congress on a party-line vote in December 2017 and gave huge tax breaks to the super rich and giant corporations, while hiking taxes on the middle class and capping SALT deduction at $10,000.

"The state and local tax deduction is the only deduction in the tax code that allows homeowners to deduct their property taxes. Thus, the SALT deduction is essential for encouraging and preserving homeownership and wealth for Black and Hispanic homeowners--especially for those who are over- assessed," added Sen. Menendez. "That is one of the many reasons that on Tuesday, the NAACP passed a resolution to support lifting Trump's $10,000 SALT cap."

The SALT deduction allows taxpayers to write-off taxes paid at the state and local level from their federal income tax bill. This supports the ability of communities, cities, and states to raise their own revenues and fund critical investments in public education, infrastructure, social services, and public safety.

As the author of the SALT Deductibility Act that would repeal the federal cap on SALT deductions, Sen. Menendez has been a leader in the fight to expand SALT deductions for hard working families in New Jersey who have been disproportionally impacted by 2017's cap.

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