Sponsored by:
Assemblywoman NANCY J. PINKIN
District 18 (Middlesex)
Assemblyman ROBERT J. KARABINCHAK
District 18 (Middlesex)
Assemblyman WAYNE P. DEANGELO
District 14 (Mercer and Middlesex)
Assemblyman DANIEL R. BENSON
District 14 (Mercer and Middlesex)
Co-Sponsored by:
Assemblymen Coughlin, Singleton, Rooney and McKeon
SYNOPSIS
Urges Congress not to eliminate property tax deduction allowable under federal tax law.
CURRENT VERSION OF TEXT
As introduced.
An Assembly Resolution urging Congress not to eliminate the property tax deduction allowable under United States federal tax law.
Whereas, Since 1862, taxpayers have been allowed to deduct specific state and local tax payments from their federal tax obligations, including the amounts paid to state and local governments for assessments on real property, known as the “property tax deduction;” and
Whereas, The purpose underpinning the property tax deduction is to ensure that taxpayers are not subject to double-taxation by federal and state authorities; to provide meaningful tax relief to citizens throughout the country; and to promote home ownership and revitalization of our communities; and
Whereas, In federal tax year 2014 alone, the property tax deduction saved over 33 million taxpayers more than $165 billion, according to the federal Internal Revenue Service (“IRS”); and
Whereas, The federal government has indicated that it is considering a proposal to increase taxes on American homeowners, including potentially millions of taxpayers in this State, by eliminating the property tax deduction; and
Whereas, The elimination of the property tax deduction would directly result in higher taxes for homeowners in New Jersey and other states, and its impact would be felt throughout the country across all income brackets, age groups, and family sizes; and
Whereas, This proposal furthermore materially increases the annual cost of homeownership, which in turn limits the ability of families to realize the American dream of owning a home, potentially precipitating decreased demand for home construction and renovation; and
Whereas, The Tax Foundation, an independent and nonpartisan tax policy institute, finds that the elimination of the property tax deduction, nationally, reduces employment by the equivalent of about 216,000 full-time workers and cuts hourly wages by four-tenths of one percent; and
Whereas, The Tax Foundation further estimates that this proposal additionally decreases our national gross domestic product in the amount of six-tenths of one percent; and
Whereas, State and local governments, realizing decreased revenue, become constrained in their ability to provide essential services—such as health care, education, and public safety—to citizens; and
Whereas, Retirees and older taxpayers, in particular, would bear a disproportionate amount of the burden; for instance, in federal tax year 2014, more than 45 percent of taxpayers eligible to claim the property tax deduction were age 55 and over, according to the IRS; and
Whereas, The property tax deduction also provides tax relief to corporate entities, including the small and local businesses that form the backbone of our communities; now, therefore,
Be It Resolved by the General Assembly of the State of New Jersey:
1. This House respectfully urges Congress not to eliminate the property tax deduction currently allowable under federal tax laws, in light of the broad benefits it affords to millions of American citizens.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the Speaker and Minority Leader of the United States House of Representatives, the Majority and Minority Leaders of the United States Senate, to each member of Congress elected from this State, the United States Secretary of the Treasury, the Commissioner of Internal Revenue, and the State Treasurer of New Jersey.
STATEMENT
This Assembly resolution petitions the United States Congress to not eliminate the property tax deduction that is permitted under federal tax law.
Under current law, a taxpayer is allowed to deduct from federal taxable income the amounts paid to state and local entities for assessments on real property. This deduction is known as the “property tax deduction.” This deduction, however, is under consideration and may be abolished as part of a reform of federal tax law.
The elimination of the property tax deduction would be harmful to individual taxpayers and communities alike. It has the potential to increase taxes on millions of taxpayers, on average of thousands of dollars per taxable year. As a consequence, fewer families may purchase or improve homes, fewer Americans would be employed in housing and other industries, and state and local governments would have fewer resources with which to provide healthcare, educational, and public safety services to our communities. Meanwhile, the benefits of this deduction are palpable—for over a century, this deduction has saved taxpayers billions of dollars, enabled greater home ownership and investment, and created jobs and improved our communities. A proposal of this nature amounts simply to a tax increase at the expense of hardworking taxpayers; disproportionately, older citizens. The property tax deduction should not be abolished.