From the Star Ledger:
The entire federal deduction for state and local taxes — an important tax break for New Jersey residents — would end under legislation proposed Thursday by Senate Republicans.
The Senate Finance Committee measure goes even further than the House, where Republican leaders agreed to keep a property tax deduction of up to $10,000 while eliminating the break for state and local income and sales taxes.
In both cases, however, Republicans have decided to target a tax break used disproportionately by New Jersey and other high-tax states, most of them governed by Democrats, in order to fund tax cuts for the rest of the country.
“New Jerseyans can’t afford to subsidize the rest of America more than we already do, and it is up to every member of Congress from New Jersey to put party aside and defeat this morally bankrupt bill before it bankrupts our future,” said U.S. Sen. Robert Menendez, D-N.J., a member of the finance committee.
More than 41 percent of New Jersey taxpayers take the deduction, according to the Tax Foundation, and 84 percent of those deducting their state and local taxes earn less than $200,000 a year, according to New Jersey Policy Perspective, a progressive research group.
Not only would state taxpayers lose a key deduction, but New Jersey would find it harder to raise taxes to make up for any federal budget cuts, said Jon Whiten, vice president of New Jersey Policy Perspective.
“Eliminating these deductions would harm millions of New Jersey families while squeezing the state at both ends,” Whiten said.