Assemblyman Michael Patrick Carroll announced today that he will introduce legislation with his district mate Anthony M. Bucco providing significant tax relief by permitting state residents to deduct the full amount of their property taxes from their state income taxes. President Donald Trump has proposed to eliminate the federal tax deduction for state and local income taxes and property taxes in his bid to overhaul the U.S. tax system for the first time since 1986. Assemblymen Carroll and Bucco are calling it an end to “double taxation” based on the federal deduction.
“We’ve heard much ado, recently, about a proposal to eliminate the federal deduction for state and local taxes,” observed Carroll (R-Morris). “Some of our Democratic colleagues have called that ‘double taxation’, and I agree. The state shouldn’t impose double taxation. Just as the feds should permit us to deduct our state and local taxes from our federally reported income, so too, Trenton should allow taxpayers to deduct their property taxes against our state taxable income.”
The bill eliminates the $10,000 maximum property tax deduction so taxpayers can reduce their cost of living. The deduction is extended to all homes and apartments owned in the state, and allows renters to deduct the exact cost of their property taxes in proportion to rent paid, even if they have roommates. It also extends the property tax credit to all residences.
Assemblyman Anthony M. Bucco, who is the Republican conference leader, is also sponsoring the bill, which will be introduced when legislators return after the November election.
“New Jersey sends more money to the federal government and gets less back per person than any other state in the nation. Over forty percent of taxpayers in the state claim the state and local tax deduction on their federal returns,” noted Bucco (R-Morris). “This could be devastating for New Jerseyans pocketbooks. Property taxes continue to increase despite being the most expensive in the nation. At some point people need tangible relief, and I think we are way past that point.”
“State property tax relief efforts are minimal and severely limited to underfunded and inefficient programs,” noted Carroll. “Property taxes are the single biggest problem facing New Jersey residents, and ending ‘double taxation’ would save New Jersey residents hundreds of millions, if not billions, each year. This would be of particular benefit to places like Morris and Somerset counties, where income taxes are high, and the return from Trenton on our tax dollars small.”
New Jersey’s property taxes have been the most expensive in the nation for several years, recently increasing to an average $8,549. In many New Jersey towns, average property taxes are much higher. The proposed deduction would save homeowners thousands of dollars annually.
“Tax cuts are by definition free,” Carroll said on the concerns about costs. “It’s spending that costs money. We could easily fund these deductions simply by foregoing much of the spending my Democratic colleagues have endorsed.”
“State funds are always being moved around to satisfy the Democrats’ priorities,” said Bucco. “Every term they pass hundreds-of-millions of spending increases without correlating spending cuts. Our residents need to make ends meet more than the state needs the highest taxes in the nation to fund programs that have not made the state more affordable. We are in a situation where more people are leaving New Jersey than moving in. And it’s because they can’t afford to live here.”
Carroll noted that in the 2018 state budget Democrats added $350 million of expenditures; none of which included property tax relief.
“We could eliminate those next year and use the funds for property tax relief,” said Carroll. “When we legalize marijuana, we could use the revenue from whatever taxes we choose to impose to offset any loss of revenue from these deductions. Indeed, if the governor could find $200 million just lying around in the budget to fund his opioid programs, that demonstrates that there is more than enough money from existing sources to both fund the operations of government and permit the people to keep more of their own money.”
“Taxpayers in New Jersey have suffered too long,” concluded Bucco. “My Republican colleagues have proposed over one-hundred bills to reduce property taxes. They haven’t been considered and now the problem could get much worse very quickly. We need to protect property taxpayers before it is too late.”