Lance and Gottheimer Offer Alternative Plan Raising Enough Money to Preserve Full Income Tax Break
On December 6, 2017, the Star-Ledger reported that “Losing your N.J. income tax break in Trump plan could hurt more than property tax shift.”
Jonathan Salant writes that “The truncated property tax break included in Republican tax reform legislation would be of little benefit to most New Jerseyans, who deduct far more in state and local income or sales taxes, according to a study released as congressional Republicans begin writing their final bill.”
The Republican tax bills are expensive new giveaways to wealthy households and major corporations at the expense of most New Jerseyans and Americans. The Republican tax reform legislation caps the property tax deduction at $10,000 and eliminates the break altogether for state and local income and sales taxes.
The House and Senate are setting up a conference committee to resolve differences between their versions of tax legislation. However, this will be an “in-name only” conference committee. Republican leadership is expected to negotiate a final version behind closed doors while the conference committee acts as a rubber stamp to approve whatever they come up with. The conference committee could issue a merged tax bill (or “conference report”) as early as this week.
The Senate tax plan and the likely conference report would:
- increase taxes for tens of millions of middle-class families;
- end health care for 13 million Americans;
- explode deficits; and
- almost certainly force cuts in 2018 to everything from nutrition assistance for families to education, Medicare, Medicaid, and infrastructure.
Unfortunately, small changes won’t fix the bills’ fundamental flaws.
Writes Salant, “The state and local tax deduction is especially important to New Jersey and other high-tax states that send billions of dollars more to Washington than they receive in services.”
“Too many Republicans from New York and New Jersey sold our region out when they voted for the House bill,” said Rep. Bill Pascrell Jr., D-9th Dist., a member of the tax-writing House Ways and Means Committee. “We need to unite as a region to kill this tax hike bill, which redistributes resources from hard-working people of the tristate area to the rest of the country.”
New Jersey is one of the few states that will face extreme tax increases under the proposed Republican tax reform legislation. “The deduction for income and sales taxes accounts for more than half of the state and local tax break in eight N.J. districts.”
“Primarily, as a result of losing the state and local tax deduction, residents of New Jersey, New York, California and Maryland would see their taxes go up by $16.7 billion under the House bill, according to the progressive Institute on Taxation and Economic Policy. The other 46 states would get a tax cut.”
“Tax reform should benefit all Americans and not pick winner states over loser states,” said Rep. Leonard Lance, R-7th Dist. “New Jersey is already one of the highest-taxed states in the nation, sending a disproportionate amount of funds to Washington. Enough is enough.”
Lance and Rep. Josh Gottheimer (NJ-D-5) have an alternative proposal that “Curbs other tax breaks that favor special interests and wealthy Americans, raising enough money to preserve the full state and local tax deduction.”