House Republicans are scheduled to roll out their tax proposals on Wednesday.
WASHINGTON — New Jersey residents no longer would be able to deduct their state income taxes under the Republican tax-cutting bill to be released Wednesday.
House Ways and Means Committee Chairman Kevin Brady said Tuesday that the only state and local tax deduction he would preserve would be the one for property taxes. Also gone would be the deduction for state and local sales taxes in states without income taxes.
“Our lawmakers in those high-tax states really believe their families are being punished most by property taxes,” Brady, R-Texas, told conservative radio host Hugh Hewitt. “They’re not based on your ability to pay. They’re just painful.”
Property tax break may be saved
Republican lawmakers from high-tax states have balked at the tax outline from President Donald Trump and congressional Republican leaders that takes aim at the deduction for the state and local taxes.
Four of the five GOP lawmakers from New Jersey voted no on a budget resolution allowing congressional Republicans to prevent a Senate filibuster and exclude Democrats from negotiations on a tax bill. Only Rep. Rodney Frelinghuysen, R-11th Dist., voted yes.
Trump and GOP leaders have justified their effort to eliminate the state and local tax deduction by calling it a subsidy for high-tax states.
“Rather than people picking standard deduction or a complicated process, and everyone shifting dollars from different states and different communities, we have a simple process where instead of high tax rates, and everyone sort of subsidizing each other and trying to figure it out, why don’t we lower rates for everybody, and you just pay your own,” said Brady, whose state does not levy income taxes.
Statistics from the State University of New York’s Rockefeller Institute of Government and the Tax Foundation refute that claim, showing that a majority of the states whose residents most use that deduction actually subsidize other states.
New Jersey taxpayers, for example, sent $3,478 per person more to Washington than they received from the federal government, more than any other state, according to the Rockefeller Institute report. Connecticut was second with $2,763 and New York third with $2,425. That comes out to 74 cents back for each $1 the Garden State sends to Washington, lowest among the 50 states.
Furthermore, the state and local tax deduction is heavily used by …read more
Source:: New Jersey Real-Time News