12/07/2017 | Press release | Distributed by Public on 12/07/2017 18:30
Sarlo-Weinberg-Turner Resolution Urges President & Republican Congress to Protect Middle Class from Costly Tax Increase
TRENTON - The Senate today voted to endorse a resolution urging President Trump and the Republican-controlled Congress not to follow through on their tax plan that would punish middle class families in New Jersey with provisions to curtail federal deductions for local taxes, among other actions.
Sponsored by Senator Paul Sarlo, the chairman of the Senate Budget and Appropriations Committee, Senate Majority Leader Loretta Weinberg and Senator Shirley Turner, the resolution, SR-153, expresses opposition to the tax reform bill pending in the United States Senate and the tax reform bill that was recently passed in the United States House of Representatives, on the basis that these proposals reduce critical deductions that are relied upon by middle class taxpayers and balance tax cuts in a manner that disproportionately and negatively impacts millions of New Jersey taxpayers.
'Reducing this deduction would make New Jersey one of the hardest hit states in the country,' said Senator Sarlo. 'It would be financially punishing for middle-class and upper-middle-class homeowners, forcing them to pay substantially more in federal taxes. It's not 'tax reform' when working families are forced to pay more.'
Economists across the political spectrum and nonpartisan tax policy public interest organizations have concluded that the proposals will end up tearing a $1 trillion to $1.5 trillion hole in the federal budget deficit while ultimately increasing the tax burdens of middle class taxpayers, a disproportionate number of whom reside in New Jersey, the resolution states.
The Institute on Taxation and Economic Policy concludes that over a quarter of New Jersey residents will end up paying increased taxes under the proposals-taxpayers who already send billions of dollars more to Washington, D.C. each year than is returned in services from the federal government
'The Trump tax plan is blatantly unbalanced and unfair,' said Senator Weinberg. 'It favors the wealthy with exorbitant tax breaks while it shortchanges middle- and low-income families. For New Jersey, it's a blueprint for financial disparity.'
To compensate for slashing tax rates on corporations and high-income individuals, a central component of the proposals is the elimination or capping of the deduction for state and local property, income, and sales taxes, which are critical deductions relied upon by middle class New Jersey taxpayers.
According to federal Internal Revenue Service statistics for Tax Year 2015, 40 percent of New Jersey taxpayers claim either the income or sales tax deduction, which in 2015 resulted in approximately 1.8 million New Jersey taxpayers deducting a combined $17 billion in state and local taxes from their federal taxable income, while over 1.5 million New Jersey homeowners deducted nearly $15 billion in property taxes during that same period. Approximately 83 percent of New Jersey taxpayers who claim the state and local tax deduction earn under $200,000 annually and half earn less than $100,000.
'The proposals would also eliminate deductions for student loan interest, ending deductions for tuition waivers for graduate students, and increasing taxes on college and university endowments, the proceeds of which are used in part to subsidize tuition and expenses for students from lower-income backgrounds,' said Senator Turner. 'This makes education more expensive and further out of reach for students with financial needs.'
Approximately 900,000 New Jersey residents gained access to health care under the Affordable Care Act, and an equally staggering number of taxpayers may be placed at risk of losing their insurance if a Senate measure is adopted that eliminates the individual mandate requirement, in turn spiking insurance premium rates for millions of other State residents by as much as 10 percent, according to the Congressional Budget Office.
And, according to The Tax Policy Center, an ancillary result of the tax redistribution measures of these policies-primarily changes to the charitable deduction-will result in a reduction in charitable contributions by $12 billion to $20 billion in 2018 alone.