If Republicans in Congress thought repealing Obamacare was difficult, passing tax reform could be just as hard. The bill unveiled Thursday is not sitting well with representatives of high tax states.
“If you have New Jersey pride, you should be ticked off right now. You should be angry because Donald Trump is coming after Jersey,” said Sen. Cory Booker.
The top concern of New Jersey’s two U.S. senators is that the bill caps the deduction for local property taxes at $10,000. Many New Jersey homeowners pay more than that and would lose the deductibility of anything over $10,000.
“If you think your property taxes are already too high, just wait until you’re taxed twice on the same money,” said Sen. Bob Menendez.
Menendez said you can’t get more middle class than Bloomfield, which is where the senators were Friday. Their host, homeowner Peter Tom, said the average property tax bill on his block is $13,000.
“It’s very likely that almost everyone on this street is going to be paying more because of this legislation,” said Tom.
The tax reform bill has many other noteworthy changes. It eliminates the deduction for medical expenses, student loan interest and caps the mortgage deduction at $500,000 on new purchases. But it’s the state and local tax deduction that’s drawing the most objection.
The bill eliminates the deductibility of state income and sales taxes, even as it caps the property tax deduction.
“If you pay taxes in this state, you are about to get screwed if this passes,” said Booker.
House Speaker Paul Ryan said the bill helps the middle class.
“With this plan, the typical family of four will save $1,182 a year on their taxes,” said Ryan at a press conference on Thursday.
Democrats see it through a different looking glass.
“It’s a plan that adds $1.5 trillion, $1.5 trillion, to our national debt to pay for massive giveaways to giant corporations and the heirs of billionaire fortunes,” said Menendez.
Supporters point to the cut in the corporate tax rate from 35 percent to 20 percent. President Trump calls that jet fuel for the economy. But four out of five New Jersey Republican congressmen say they can’t support the bill as is. The fifth, Rodney Frelinghuysen, is noncommittal.
The Democratic senators say they’re open to negotiation on tax reform, but that Republicans have not yet invited them to the table.