U.S. Reps. Leonard Lance (R-NJ) and Bill Pascrell, Jr.
(D-NJ) sent a letter to Treasury Secretary Steve Mnuchin this week, urging him to preserve the federal deduction for state and local taxes in any plan to reform the tax code.
The Trump Administration’s draft plan released earlier this year eliminated the deduction.
“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,” Lance and Pascrell wrote in the letter, which was co-signed by 68 members of Congress. “We hope you will reconsider this dramatic increase to the tax burden borne to families and homeowners in select high-cost states.”
They said New Jersey taxpayers pay a significant amount in federal taxes and support federal expenditures but do not see as great a return in federal spending as other states. Eliminating the deduction would amount to a federal tax increase on New Jersey taxpayers and only further the disparity between New Jersey and other states.
“[O]ur states are economic engines that deliver disproportionately more revenue to the federal government than they receive back, paying more for services delivered to the country at large. Faced with an already high tax burden and high cost of living, our communities cannot afford another increase to their taxes,” the representatives wrote.
The National Governors Association, United States Conference of Mayors, and the National Conference of State Legislatures joined the lawmakers in opposing the elimination of the deduction.