Trump's Tax Plan: How Much Each New Jersey Town Could Pay

Your New Jersey town could have cough up thousands of extra dollars each year to balance its books if President Donald Trump's tax plan is passed.

That would be to make up for the loss of one deduction - which could be offset by other parts of the plan, such as the raising of the standard deduction.

As part of a much-awaited reform package, the Trump administration says it plans to dump the federal property tax deduction for state and local taxes that saves New Jerseyans thousands of dollars a year. In fact, the loss of the federal property tax deduction could mean a loss of as much as $21,500 in write-offs for the average New Jersey taxpayer, according to NJ Spotlight.

And taxpayers in some New Jersey towns will have to pay more - really, a lot more - than others. NJ Spotlight has provided a map that shows how much towns could lose if the deduction is wiped out (see below).

The map shows that taxpayers in Short Hills, where the average property tax is $28,000, could be hurt more than anybody, according to NJ Spotlight, while Trenton would be hurt the least.

Here is the map - run your cursor over your town and zip code to see each communities total state and local tax deduction and its average adjusted gross income, and click on your town to see the average individual tax burden:

Read the whole NJ Spotlight report by clicking here.

Critics view the plan as a giveaway to corporations and a tax cut that will likely benefit the rich while removing a deduction that property owners have come to depend on.

New Jersey Policy Perspective, a left-learning think tank, says the Garden State has the second highest share of taxpayers who would see a tax hike under the Trump-GOP plan, at 26.4 percent. Nationally 16.7 percent of taxpayers would see a tax increase.

"While GOP leaders have pitched the plan as a tax cut for the middle class, the analysis shows that this is not true for New Jersey or the nation as a whole," according to the group. "While most New Jerseyans would, in fact, receive a modest tax cut, on average that cut would amount to less than one percent of their income.

"The wealthiest 1 percent of the state’s residents, by contrast, would reap a financial windfall, receiving 82 percent of the total tax cuts going to New Jersey while the bottom 40 percent of New Jerseyans would receive just 8 percent of the tax cut, and the middle 20 percent just 9 percent."

Republican Rep. Leonard Lance and and Democratic Rep. Bill Pascrell, both from New Jersey, recently released a bipartisan congressional letter, co-signed by 68 others, asking Treasury Secretary Steven Mnuchin to preserve the federal deduction for state and local taxes in any plan to reform the tax code.

Both Lance and Pascrell said ditching the deduction would adversely affect New Jersey.

“New Jersey residents pay the highest property taxes in the United States. Eliminating this deduction would increase taxes on the average New Jersey taxpayer by $3,500 per year,” the members wrote in the letter. “We hope you will reconsider this dramatic increase to the tax burden borne to families and homeowners in select high-cost states.”

In a recent video announcing the tax reform plan, however, Mnuchin said the Trump administration plans to eliminate all tax deductions other than mortgage interest and charitable deductions.
"We think that will be sweeping reform," he said during a press conference.

Congressional representatives are currently reviewing the proposal, and Trump has called for approving the plan by the end of the year.

Mnuchin and Gary Cohn, chief economic adviser to Trump and director of the National Economic Council, said the financial hit property owners would take would be offset by economic growth and an overall tax cut.

Patch file photo