How a Tax Deduction Elimination Would Affect New Jersey

Date: October 31, 2017

Related Content: News State New Jersey Taxes

Garden State residents rely on this deduction because of their sky-high state property taxes.

New Jerseyans pay the highest property taxes in the country, and if a federal proposal to eliminate a key tax deduction is approved, it could have a big impact on Garden State residents.

Currently, state and local taxes can be deducted from federal tax returns, but President Trump wants to eliminate this deduction because he believes it unfairly forces many Americans to subsidize the “very wealthy” in a few states. However, $51.30 of every $100 in state and local taxes deducted went to households with $200,000 or less in annual income, NJ.com reported. And in New Jersey, residents sent more in taxes to Washington than they received in benefits: 74 cents back for every $1 paid in federal taxes.

However, there are also positive tax reform measures being considered—namely, reducing the tax rate on pass-through businesses, the majority of American small companies, from 39.6 percent to 25 percent—that would benefit small businesses nationwide. NFIB supports this proposal and will continue to work with federal lawmakers on tax reform.

Related Content: News | State | New Jersey | Taxes

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