Bill Text: NJ SR152 | 2016-2017 | Regular Session | Introduced
Bill Title: Opposes proposed changes to state and local tax deduction contained in recent federal tax reform proposals put forth by Trump Administration and Republican lawmakers in Congress.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-11-30 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [SR152 Detail]
Download: New_Jersey-2016-SR152-Introduced.html
Sponsored by:
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
Opposes proposed changes to state and local tax deduction contained in recent federal tax reform proposals put forth by Trump Administration and Republican lawmakers in Congress.
CURRENT VERSION OF TEXT
As introduced.
A Senate Resolution opposing the proposed changes to the state and local tax deduction contained in recent federal tax reform proposals put forth by the Trump Administration and Republican lawmakers in Congress.
Whereas, Recent proposals have been put forth by the Trump Administration and Republican lawmakers in Congress over the last few weeks that aim to reform the federal tax system for individual and business taxpayers; and
Whereas, These tax reform proposals have certain technical differences but generally are unified by their efforts to cut taxes for American workers, to increase competitiveness for American businesses by reducing corporate tax rates, to bring back trillions of dollars that are currently kept offshore to reinvest in the American economy, and to simplify the federal tax code for all Americans; and
Whereas, An important component of the proposals' efforts to simplify the federal tax code is a recommendation to eliminate most itemized deductions and personal exemptions that are currently allowed to be claimed by individual taxpayers in favor of a larger, more generous standard deduction that is expected to increase from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples filing jointly; and
Whereas, In eliminating most itemized deductions and personal exemptions in favor of a larger, standard deduction, the proposals call for either an end to, or sharp limits on, the long-standing federal deduction that permits taxpayers to reduce their federal taxable gross income by the amount of property taxes and either income or sales taxes paid to state and local jurisdictions during the taxable year; and
Whereas, The tax reform proposal put forth by the Trump Administration in September specifically calls for a repeal of the state and local tax deduction, while the tax plan more recently unveiled by Republican lawmakers in Congress eliminates the tax break for income or sales taxes paid by individual taxpayers but retains a sharply limited deduction for individuals for up to $10,000 of property taxes paid to state and local jurisdictions during the taxable year; and
Whereas, The proposed changes to the federal deduction for state and local taxes are being advanced under both proposals as a means to generate additional revenue to pay for the federal tax reform, but do so at a significant cost for New Jersey residents who rely on the tax benefits provided by the current federal deduction more heavily than the residents of most other states; and
Whereas, According to an analysis of the federal Internal Revenue Service's Statistics of Income data by the Pew Charitable Trusts, nationwide 29.6 percent of all taxpayers filing a federal tax return in tax year 2015 filed a tax return that included a claim for the state and local tax deduction, with an average amount of $12,471 being claimed as a deduction per claimant; and
Whereas, That same analysis of those federal data indicate that the percentage of New Jersey taxpayers claiming the deduction (and the average amount of the deduction per claimant) is much higher - in tax year 2015, 41.2 of all New Jersey taxpayers filing a federal tax return filed a return that included a claim for the state and local tax deduction, with an average amount of $17,850 being claimed as a deduction per claimant; and
Whereas, For many of these New Jersey taxpayers, the proposed changes to the federal deduction for state and local taxes will result in the payment of higher federal taxes, dependent on the level of income generated by each taxpayer and the unique mix of personal exemptions, deductions, and credits that are currently claimed; and
Whereas, The additional tax that these New Jersey taxpayers will be required to pay as a result of the proposed changes to the federal deduction for state and local taxes is unfair given that the additional tax under the tax reform proposals amounts to a double tax or a federal tax on top of the existing state or local property taxes and either income or sales taxes that have already been paid; and
Whereas, The additional tax that will be paid by these New Jersey taxpayers as a result of the proposed changes also is unfair given that New Jersey residents already contribute more through the payment of federal taxes than is returned to the State in the form of federal aid; and
Whereas, The tax reform proposals put forth by the Trump Administration and Republican lawmakers in Congress will require many New Jersey residents to pay more in tax despite the fact that by some estimates New Jerseyans currently receive only 48 cents back for each dollar they pay in federal income tax; now, therefore,
Be It Resolved by the Senate of the State of New Jersey:
1. This House opposes the proposed changes to the federal deduction for state and local taxes that have been put forth by the Trump Administration and Republican lawmakers in Congress as part of their recent efforts to reform the federal tax system for individual and business taxpayers.
2.
This House respectfully urges the President and Congress to retain an
itemized deduction or other similar benefit under the federal tax code for the
payment of state and local taxes in any tax reform proposal enacted into law in
the future considering the significant, negative impact eliminating, or sharply
limiting, the current deduction will have on the State of New Jersey and its
residents.
3. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Secretary of the Senate to the President and Vice President of the United States, the Majority and Minority Leaders of the United States Senate, the Speaker and Minority Leader of the United States House of Representatives, and each member of Congress elected from this State.
STATEMENT
This resolution expresses the Senate's opposition to the proposed changes to the federal deduction for state and local taxes that have been put forth by the Trump Administration and Republican lawmakers in Congress as part of their recent efforts to reform the federal tax system, and respectfully urges the President and Congress to retain an itemized deduction or other similar benefit under the federal tax code for the payment of state and local taxes in any tax reform proposal enacted into law in the future considering the significant, negative impact eliminating, or sharply limiting, the current deduction will have on New Jersey and its residents.
