Changes in the new tax laws being passed by Congress are detrimental to middle-class New Jerseyans. Period. Bottom Line.
As I am the former Mayor in Franklin Township and current Somerset County Freeholder, I am concerned for the loss suffered by my constituents. As a practicing certified public accountant (CPA), I am upset at the extra tax burden imposed upon my clients.
Being both an elected official and a CPA gives me a unique perspective in financial and tax matters – especially tax law changes that affect the middle class.
These new laws will increase taxes, drive down property values, and subject citizens to double taxation (a protection that has been in place for about a century) for New Jersey residents. As taxes increase on the Federal level, this jeopardizes the services (such as roads, non-profits safety nets, emergency service funding) that are provided not only by the State, but especially on the County and Local level.
Corporations and other businesses can deduct their State and Local Taxes (SALT), as well as their property taxes – which is fair – to avoid double taxation. Why the double standard to refuse to allow individuals a federal tax break for these exact same taxes? The Congressional tax bill would eliminate many of these provisions for individuals.
When income tax was enacted in 1913, conservatives of the day demanded SALT deductions to avoid federal intrusion on state and local taxes. Indeed, municipal bonds are not taxed because the U.S. Constitution, in essence, does not allow the States and the Federal government to tax each other; to me, that protection is now being shredded.
Here are some major provisions. This new law, as currently being voted (subject to change in the final version) will cap real estate tax deductions at $10,000 (below the average property tax bill for large portions of New Jersey), allow a mortgage deduction for up to $750,000 of mortgage (reducing the deduction for thousands of residents in New Jersey), eliminate the deduction for home equity lines (a benefit used by lower-income, middle-income, and higher-income New Jersey residents – many use an equity line to send their kids to college, basically increasing the college tuition burden), eliminates business deductions for employees (a benefit used by people in sales, tele-commuters, those who use their own computer, etc.). Are there a few provisions that help us? Sure, but they pale in comparison to this cash grab by the Federal government. If your net worth exceeds $11 million and you do not reside in the Northeast, then you do better to the tune of several million dollars. If you are the New Jersey middle class – sorry, you are out of luck; Congress does not give a darn. The New Jersey Society of CPAs (of which I am a member) had a survey of its members, in which over two-thirds (!) thought these newly created tax increases would hurt their clients! Who is against this bill? AARP, New Jersey Chamber of Commerce, New Jersey Bankers Association, various national lobbies for Senior citizens, and many others.
To me, tax breaks are terrific, but when you give a benefit to some states at the expense of others, you are being discriminatory. Why not give everyone the same tax break?
Yes, we are a high tax state – yet the Federal government is increasing our taxes even more. New Jersey is dead last in receiving per capita money back from Washington that we send them. It is high time we told Washington that if we pay more to them, we want more back.
I applaud our New Jersey Congressional delegation, all of whom, except one, voted against hurting their constituents.
I have been in politics for a while – as a Councilman, a Mayor, and now as a Freeholder. I love serving our residents. I have seen good laws and not-so-good laws passed. I do not understand why my State has to suffer through official action of Congress to benefit other States. Do those voting “yes” to hurt our middle class not understand or just not care? No matter what, they are voting us a tax increase. Our voices must be heard.