From the Star Ledger:
During his brief speech, Treasury Secretary Mnuchin said that there will be winners and losers in New Jersey under the tax-reform plans.
“For people who make a million dollars in high-tax states, there will be a tax increase,” he said. “But as the president says, he’s willing to have his taxes go up to do the right thing.”
Good for him, but the more I study these competing packages, the worse it looks for Jersey.
If governor-elect Phil Murphy gets his wish and brings back a top tax rate of 10.75 percent, taxpayers in that bracket will no longer be able to deduct it from their federal taxes. That means they could pay a marginal tax rate of more than 50 cents on the dollar.
That’s a big luxury tax for living in New Jersey. Who’s going to be left to pay the taxes and mortgages of all those first homes in places like Summit and Essex Fells and second homes in places like Lavallette and Long Beach Island?
But the plan looks great for lower-costs states like Pennsylvania and North Carolina, where that $24,400 standard deduction likely exceeds the deductions of all but a few taxpayers.
Perhaps you can’t always get what you want.
But if this package goes through, I predict a lot of Jerseyans will find they need a house on the Outer Banks.