Trump, Congress Looking To Take More Of NJ Property Tax Deduction

President Trump and Republican lawmakers are looking to pass a second phase of tax cuts – possibly as early as October – that some lawmakers say could, once again, hit New Jersey hard.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, says he plans to outline a second package of tax cuts on Tuesday that he says will be tax reform "2.0."

But U.S. Rep. Bill Pascrell, D-Passaic, said the second phase of the Republican tax plan will make the "egregious" cap placed on federal deductions for state and local tax Deductions, or SALT, permanent.

“As New Jersey’s Yogi Berra liked to say, it’s déjà vu all over again. Another day, another attempt by congressional Republicans to stick it to Garden State," Pascrell said.

New Jersey lawmakers say the plan would make permanent what's already unpopular in the 2017 law, particularly the elimination of personal exemptions to help pay for tax cuts that some estimate could cost more than $1 trillion.

Under the current law, some cuts are permanent and some – including the $10,000 cap – expire after 2025.

Three important components of the 2017 law are expected end up costing New Jersey taxpayers more:

• The law eliminates deductions for state income or sales taxes.
• The law caps the deduction for property taxes at $10,000. This element is viewed as a compromise because original tax reform plans called for doing away with the deduction entirely.
• The law preserves the mortgage interest deduction only for existing mortgages of up to $1 million but cap future deductions for mortgages up to only $500,000.

Pascrell and other lawmakers, noting that New Jersey's typically deducted as much as $17,000 in property taxes, called for overturning the law – not extending it.

"The GOP tax scam should be overturned and the full state and local tax deduction reinstated," Pascrell said. "Let the top 1 percent pay their fair share and leave New Jersey the hell alone.”

Brady told reporters that the tax cuts will essentially look to make last year's tax reform legislation permanent. Other parts of the package may focus on encouraging retirement savings and business innovation, according to The Hill.

"Just as the success of the Tax Cuts and Jobs Act came because we were listening to our members and their constituents back home, we'll do the same in 2.0," Brady told reporters.

Trump said he wants to further lower the corporate tax rate, from 21 percent to 20 percent, as part of a second round of tax cuts later this year, according to The Washington Post.

Pascrell said New Jersey is already burdened with the highest property taxes in America, and "for years people in my state relied on the state and local tax deduction to provide their families with flexibility to pay their bills."

"Republicans took care of that, capping those deduction to help pay for a trillion-dollar tax cut for big corporations and big tycoons," he said. "Now Republicans are announcing the SALT cap is going to be made permanent to bedevil New Jerseyans for all time. We already know Republicans go out of their way to bring pain on the people of the Northeast. They said so themselves. But they keep trying to prove it again to us. We’ve had it with this garbage."

Getty Images