(TRENTON) - Legislation sponsored by Assembly Democrats Nancy Pinkin, Robert Karabinchak, Wayne DeAngelo and Daniel R. Benson to petition the United States Congress to not eliminate the federal property tax deduction so valuable to New Jerseyans was released Monday by the Assembly Budget Committee.
Under current law, a taxpayer is allowed to deduct from federal taxable income the amounts paid to state and local entities for assessments on real property. This deduction is known as the property tax deduction. This deduction, however, is under consideration and may be abolished as part of a reform of federal tax law proposed by President Trump.
The change would hit New Jersey homeowners hard.
"The federal property tax deduction is to ensure that taxpayers are not subject to double-taxation by federal and state authorities, all while providing meaningful tax relief to citizens throughout the country and promoting home ownership and revitalization of our communities," said Pinkin (D-Middlesex). "The elimination of the property tax deduction would be harmful to individual taxpayers and communities alike. It has the potential to increase taxes on millions of New Jersey taxpayers, on average of thousands of dollars per taxable year."
"As a consequence, fewer families may purchase or improve homes, fewer Americans would be employed in housing and other industries and state and local governments would have fewer resources with which to provide healthcare, education, and public safety services to our communities," said Karabinchak (D-Middlesex). "Meanwhile, the benefits of this deduction are palpable--for over a century, this deduction has saved taxpayers billions of dollars, enabled greater home ownership and investment and created jobs and improved our communities.:
"A proposal of this nature amounts simply to a tax increase at the expense of hardworking taxpayers, but worst of all, it would disproportionately hit senior citizens," said DeAngelo (D-Mercer/Middlesex). "Quite simply, the property tax deduction should not be abolished."
"The elimination of the property tax deduction would directly result in higher taxes for homeowners in New Jersey, and its impact would be felt across all income brackets, age groups and family sizes," said Benson (D-Mercer/Middlesex). "Retirees and older taxpayers, in particular, would bear a disproportionate amount of the burden. For instance, in federal tax year 2014, more than 45 percent of taxpayers eligible to claim the property tax deduction were age 55 and over."
If approved by the full Assembly, the resolution shall be transmitted by the Clerk of the General Assembly to the Speaker and Minority Leader of the United States House of Representatives, the Majority and Minority Leaders of the United States Senate, to each member of Congress elected from this state, the United States Secretary of the Treasury, the Commissioner of Internal Revenue and the State Treasurer of New Jersey.
Originally posted by the NJ Assembly Democrats.