Bill Text: NJ AR224 | 2020-2021 | Regular Session | Introduced
Bill Title: Urges federal government to repeal state and local tax deduction caps.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-02-23 - Introduced, Referred to Assembly Budget Committee [AR224 Detail]
Download: New_Jersey-2020-AR224-Introduced.html
Sponsored by:
Assemblywoman HOLLY T. SCHEPISI
District 39 (Bergen and Passaic)
SYNOPSIS
Urges federal government to repeal state and local tax deduction caps.
CURRENT VERSION OF TEXT
As introduced.
An Assembly Resolution urging the federal government to repeal the state and local tax deduction caps.
Whereas, New Jersey is a "donor state," meaning that the State pays more in federal taxes than it receives in federal funding; and
Whereas, Since 1913, American taxpayers, including many New Jersey residents, have had the option of using the federal government's state and local tax (SALT) deduction when they file their federal income tax returns; and
Whereas, Under the SALT deduction, American taxpayers who itemize on their federal income tax returns, rather than claim the standard deduction, may deduct state and local real estate and personal property taxes as well as either state and local income or sales taxes; and
Whereas, Historically, 41 percent of New Jersey tax filers have claimed the SALT deduction on their federal income tax returns due to the State's high property taxes; and
Whereas, The federal "Tax Cuts and Jobs Act," Pub.L. 115-97, which was enacted in December 2017, capped the SALT deduction at $10,000 for single filers, head of household filers, and married taxpayers filing jointly, and capped the SALT deduction at $5,000 for married taxpayers filing separately; and
Whereas, New Jersey's high property taxes have only increased since the SALT deduction caps were enacted, with the average property tax bill in 2020 hitting $9,112, an increase of 105 percent since 2000; and
Whereas, Since the enactment of the SALT deduction caps, many New Jersey residents, including those in the middle class, have moved out of the State to lower-tax states, and repealing the caps would kick-start the development of suburban markets in the State; and
Whereas, Coronavirus Disease 2019 (COVID-19), which is caused by a novel coronavirus called SARS-CoV-2, has caused a global pandemic leading to unprecedented and overwhelming health and economic crises throughout the United States; and
Whereas, New Jersey residents, who already pay some of the highest tax rates and cost of living expenses in the country, are financially struggling in the wake of the COVID-19 pandemic; and
Whereas, The repeal of the SALT deduction caps, coupled with lower State taxes, would provide significant relief to New Jersey residents and help make the State a more affordable place in which to live and conduct business; and
Whereas, New Jersey taxpayers' hard-earned money should remain with them instead of being subject to high taxes by the State and federal government, which hamper the State's economic growth; and
Whereas, President Joseph R. Biden, Jr. has indicated a willingness to repeal the SALT deduction caps, and it is fitting and proper for New Jersey's congressional delegation to continue to work with the President and congressional leaders to achieve this goal; and
Whereas, Because many New Jersey residents are facing unprecedented economic hardships, which have been exacerbated by the COVID-19 pandemic, and given the disparity in the amount that New Jersey residents pay in federal taxes in comparison to the amount that they receive in federal funding, it is necessary and proper to urge the federal government to repeal the SALT deduction caps; now, therefore,
Be It Resolved by the General Assembly of the State of New Jersey:
1. This House urges the federal government to repeal the state and local tax deduction caps.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the President of the United States, the Majority Leader of the United States Senate, the Speaker of the United States House of Representatives, and each member of Congress elected from this State.
STATEMENT
This resolution urges the federal government to repeal the state and local tax (SALT) deduction caps. The federal "Tax Cuts and Jobs Act," Pub.L. 115-97, which was enacted in December 2017, capped the SALT deduction at $10,000 for single filers, head of household filers, and married taxpayers filing jointly, and capped the SALT deduction at $5,000 for married taxpayers filing separately
Since 1913, American taxpayers, including many New Jersey residents, have had the option of using the SALT deduction when they file their federal income tax returns. Under the SALT deduction, American taxpayers who itemize on their returns, rather than claim the standard deduction, may deduct state and local real estate and personal property taxes as well as either state and local income or sales taxes. Historically, 41 percent of New Jersey tax filers have claimed the SALT deduction on their returns. New Jersey's high property taxes have only increased since the SALT deduction caps were enacted, with the average property tax bill in 2020 hitting $9,112, an increase of 105 percent since 2000. Since the enactment of the SALT deduction caps, many New Jersey residents, including those in the middle class, have moved out of the State to lower-tax states. Repealing the caps would kick-start the development of suburban markets in the State and would provide significant relief to New Jersey residents.
Coronavirus Disease 2019 (COVID-19), which is caused by a novel coronavirus called SARS-CoV-2, has caused a global pandemic leading to unprecedented and overwhelming health and economic crises throughout the United States. New Jersey residents, who already pay some of the highest tax rates and cost of living expenses in the country, are financially struggling in the wake of the COVID-19 pandemic.
New Jersey is a "donor state," meaning that the State pays more in federal taxes than it receives in federal funding. Because many New Jersey residents are facing unprecedented economic hardships, which have been exacerbated by the COVID-19 pandemic, and given the disparity in the amount that New Jersey residents pay in federal taxes in comparison to the amount that they receive in federal funding, the federal government should immediately repeal the SALT deduction caps.
