Freeholders call upon Congress to say No to Eliminating Federal Income Tax Deduction for State and Local Taxes

The state and local tax deduction (SALT) has for more than a century been used by taxpayers in Ocean County and throughout New Jersey as a deduction on federal income tax returns.

Ocean County Freeholder Director Joseph H. Vicari along with his colleagues on the Board of Chosen Freeholders doesn’t want that to change any time soon for the hundreds of thousands of county residents that use it.

“This proposal which is being given serious consideration by Congress to eliminate this deduction is a serious mistake,” Vicari said. “This particular income tax deduction is used by almost everyone who itemizes their income taxes. This deduction prevents double taxation since state and local taxes are mandatory payments.”

The Ocean County Board of Chosen Freeholders recently passed a resolution expressing “its strong opposition to any tax reform proposal that would eliminate the SALT deduction,” according to the resolution.

“We are urging the U.S. Congress and our Congressional leaders to join us in publicly opposing any such proposal,” Vicari said.

The Board joins a growing chorus of opposition to the proposal including the New Jersey Association of Counties, the National Association of Counties, the National League of Cities and the United States Conference of Mayors.

According to these organizations, eliminating or capping federal deductibility for state and local property, sales and income taxes would represent double taxation on American taxpayers, a principle strongly rejected throughout the rest of the tax code.

“This federal cost shift onto local governments would place extreme pressure on Ocean County’s budget including diminished revenue for essential local government investments, including public safety and public infrastructure,” according to the Freeholder resolution. “Increased federal taxation and reduced County services will harm our local housing market, decrease home values and erode our local tax base.”

Vicari noted that Ocean County and the state of New Jersey pays more than its fair share of taxes to the federal government with one of the worst returns.

The average New Jersey taxpayer paid $18,367 in federal income taxes, behind only Connecticut, New York, and Massachusetts. That’s $4,316 above the national average of $14,051, according to published reports.

In addition, in 2015, New Jerseyans received only 48 cents back for every dollar they pay in income tax, the fourth lowest rate in the country, according to WalletHub, a personal finance resource website.

“We cannot ignore the importance of this deduction,” Vicari said. “It has been of true value for more than 100 years. We need to make certain it is not eliminated.”

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A Lang
8 years ago

Marshall said in Marbury v. Madison (1803) that the power to tax is the power to destroy. Should the executive have his way with Congress, the middle class, the class of people that own property, will be reduced because because landlords will be able to deduct their property taxes as a business expense whereas the residential homeowner will not.