Senate Dems to force vote on overturning Trump to save your property tax break

Posted Oct 22, 2019

WASHINGTON — When New Jersey and other states tried get around the Republican tax law’s $10,000 cap on deducting state and local taxes, the Trump administration said no.

Now the U.S. Senate will vote on overturning that decision.

Senate Democratic Leader Chuck Schumer of New York said Tuesday that he will force a vote to reject the Treasury Department ruling that basically prevented efforts to set up municipal charitable funds for homeowners to pay into in lieu of property taxes.

Under the Congressional Review Act, both houses of Congress can vote to overturn federal regulations. This is the same law Republicans used in 2017 to roll back environmental protections enacted in the final months of President Barack Obama’s administration, curb workplace safety rules, and repeal a regulation that could have blocked individuals with mental illnesses from buying guns.

In this case, the Treasury Department issued a rule that severely limited any benefit to taxpayers for contributing to charitable funds. While New Jersey had authorized municipalities to set them up, towns failed to take advantage of the new law.

The Internal Revenue Service had for years approved such charitable accounts to allow taxpayer subsidies for private and religious schools, but Trump administration officials, in an action the Treasury inspector general for tax administration called a departure from normal procedure, inserted themselves into the debate over municipal charitable funds.

State officials pitched the charitable funds as a way to get around the limit on deducting state and local income, sales and property taxes, a tax break commonly known as SALT. The cap disproportionately affected New Jersey and other high-tax states, most of which send billions of dollars more to Washington than they receive in services.

“It’s probably one of the major reasons the House flipped from Republican to Democrat,” Schumer said on Senate floor. “So many of those districts in New Jersey and California and New York and Pennsylvania were affected by this SALT cap and people rebelled, threw out their Republican congressmen and put new people in.”

But it wasn’t just the high-tax states that were hurt by the Treasury ruling, Schumer said. He cited programs in Kentucky, South Carolina and Colorado, three states with Republican senators, who have said they would be hurt by the new rule.

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