From the Star Ledger:
Murphy moves to save your property tax break from Trump. But will it stick?
Gov. Phil Murphy just took action to save your federal property tax break from President Donald Trump’s new tax law.
The Democratic governor signed a law Friday that gives New Jersey taxpayers a shot at getting around the Republican tax overhaul, which sets limits on how much they can deduct in state and local taxes.
The law Murphy, a frequent Trump critic, signed will soon allow New Jersey’s towns, counties and school districts to set up charitable funds that taxpayers can contribute to instead of paying property taxes directly.
Homeowners can then deduct those charitable contributions from their federal income taxes, uncapped.
“We know that President Trump and the leadership in Congress cooked this up to benefit the states that were with him, instead of treating everyone fairly, and give a windfall to the wealthiest individuals in the biggest companies,” Murphy said before signing the law at East Rutherford’s town hall.
“It is divisive, it is wrong, and we will continue to fight,” the governor added.
…
New Jersey has the highest property taxes in the country, averaging $8,690 last year. The state and local tax deduction helped take the edge off.Though 61.5 percent of New Jersey households will see a tax decrease under the federal law, that’s a smaller percentage than 45 other states, according to the Tax Policy Center, a joint venture of the progressive Urban Institute and Brookings Institution.
And more than 1 in 10 New Jersey households will see their taxes rise, more than any other state, according to the group.
Murphy said Friday that Trump’s cap is “a de facto tax hike on countless New Jersey households.”
…
But there’s no guarantee the Internal Revenue Service will allow these deductions. The Trump administration is opposed to the workaround, saying the state and local tax deduction is an unfair subsidy for high-tax states.Republican state lawmakers skeptical of the scheme have warned that New Jerseyans could wind up facing fines and penalties if the IRS rejects it.
Great quote posted in the comments over at the ledger on the above piece:
“I’m at the breaking point,” said Gretchen Gardner, an Austin artist who bought a 1930s bungalow in the Bouldin neighborhood just south of downtown in 1991 and has watched her property tax bill soar to $8,500 this year.
“It’s not because I don’t like paying taxes,” said Gardner, who attended both meetings. “I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now I can’t afford to live here anymore. I’ll protest my appraisal notice, but that’s not enough. Someone needs to step in and address the big picture.”
New Jersey is such a great place to live and contributes so much to America’s culture and economy you would think the other 56 states would gladly continue to subsidize new jerseyans lifestyles.
Yes, you would think the rich would do the right thing, and help out. Instead, they lobby for even more tax breaks. This is what happens when corporations and passive income barely pay any taxes, it’s put on the working poor, like this artist. This is inevitable if we continue to give 5 billion tax breaks to companies like amazon to do business in your state. This can’t keep up for much longer.
When the hell are people going to grow up and understand it costs money to run society. My friend, who is single in his late 30’s, is such a cheap a$$, that he fought to have his property taxes lowered by 400 dollars. Does he really need the 400? No, he is single, and swimming in cash. He did it because he looks at taxes as a form of theft.
People like him, are why this this govt will live in perpetual debt. They love using all the services, but they use more than they put in. When it comes time to pay the cost of society, they all try to cheat the irs, and get over on their true tax bill.
How many people are out there cheating their tax bill, and then these same freaks are the one’s claiming taxes are a form of theft as they cheat the tax system and throw the burden on future and current generations.
grim says:
May 5, 2018 at 7:41 am
Great quote posted in the comments over at the ledger on the above piece:
“I’m at the breaking point,” said Gretchen Gardner, an Austin artist who bought a 1930s bungalow in the Bouldin neighborhood just south of downtown in 1991 and has watched her property tax bill soar to $8,500 this year.
“It’s not because I don’t like paying taxes,” said Gardner, who attended both meetings. “I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now I can’t afford to live here anymore. I’ll protest my appraisal notice, but that’s not enough. Someone needs to step in and address the big picture.”
Not sure I would argue that it subsidizes new jerseyans lifestyles.
The deduction is really a subsidy to the local Democratic machine as much of the state money is fed to the bastion cities which in turn become stronger and seek to expand further. aka “it’s feeding the beast”.
Now it’s funny that Murphy appears to want to raise the state deduction to 15k. I guess it helps his cause somehow.
For the taxes that are paid in this state we have the best of everything, schools,roads,tunnels bridges mass transit and we don’t. It’s all falling apart and the answer for some is more taxes and it’s still falling apart
Yeah, the hypocrisy is amazing but obviously not beyond the liberal mind…
Outrage pure outrage! that the Feds would limit the SALT deduction of New Jerseyans to $10k while New Jersey….drumroll please….limits the property tax deduction of its residents to $10k…..Can’t make this stuff up lol.
I suspect that is why the high profile lawsuit against the Feds never proceeded. Some litigator wearing real world goggles looked at the State and said “are you CRAZY? The judge will laugh you out of the courtroom contesting the same limit you impose on your own residents.”
California I will break it down for you in bite size pieces.
1. There are people in NJ who say the high property taxes are worth it because we have the best schools. When lower cost states like Delaware or Florida are mentioned are mentioned they are scorned as having crap school systems. Are you with me?
Now come college time many of these same parents are sending their kids to these other state schools that they scorned and paying out of state tuition. See where I am going?
The student population in those state schools are overwhelming from in state. These students are products of those same primary schools deemed to be scrappy. Do you understand now?? Are you capable of connecting the last couple of dots?
How many people are out there cheating their tax bill, and then these same freaks are the one’s claiming taxes are a form of theft as they cheat the tax system and throw the burden on future and current generations.
So you support the current governor, who just created a way for rich people to cheat on their tax bill?
You don’t honestly think that middle and low income residents can benefit from this? Most NJ households pay their property taxes through mortgage escrow, and it’s highly unlikely that the mortgage companies are going to play along with this scheme. It’s going to be the well off, with the ability to just write a $20k check every year, that benefit from this. (If by some chance the feds actually let it happen).
3b,
Do you understand that if these state colleges you speak of had to depend only on homegrown state residents, they would shut down overnight? You just don’t get it.
For the millionth time, do you understand people with money, which jersey has a ton of, like to go out of state for colleges. It’s a ritual, dude! Who else do you think can afford out of state schools?
Grim,
Now apply this practice of catering to the rich on a national scale.
Now you know why the govt is in debt.
9:42 I do see, but it is a little “skewed”, the assumption is that you 1. Actually trust the NJ test scores and ratings, 2. You equate money spent with quality 3. The ‘nice climate’ states with ‘crappy’ schools may (or may not) attract good teachers who were trained in other places….
3b,
Have you experienced a public education in Florida? And don’t go ask some rich family in Florida how it is, go ask the 90%.
When I used to go to Florida for summers in my youth, all the kids were two to three grade levels below me. Keep thinking that all state education systems are the same. The students that are competent in these states get a lot of help from their parents or are transplants from a good education state.
10:09 Ridiculous
Pumps, if for example you’re paying 30 grand in property taxes, give us a number that even The Great Pumpkin would say, “no mas, this is ridiculous, “I’m moving!!” What would it be? 40 grand? 50 grand? 80 grand?
Re: the Austin resident comment on increasing taxes and cost of living…
For anyone bored out of their brains at their kid’s lax today looking for an escape into your own grey matter for a brief respite…..
Think of how different the economics of this area would be absent the massive generational runup in real estate. Seriously. Do the math of your own and your peers’ balance sheets with house price appreciation that only equals inflation. Or less. Include your parents’ home into that equation, if it has/will come your way…And then look at the same analysis regarding rapidly growing areas out of state.
Point is, without asset appreciation the only way to build wealth is saving after tax income. For most area families – especially the ‘paycheck to paycheck wealthy’ – it is a large hurdle to bank $500k after taxes in any reasonable time frame from the W2.
With the runup in real estate prices locally? No problem. Pick that amount up on appreciation of the primary residence. Especially with the tax free aspect of a primary residence sale or inheritance.
What does this have to do with some older woman in TX?
There’s been some argument on here that moving to a ‘hot’ locale from NJ is foolish because as more (and more better compensated) professionals migrate there the locale will resemble the NJ you are leaving…Rapidly rising housing costs, costly amenities, overpopulation, etc.
As my kids would say when they were tweens – “No Duh!”
My town in the late 70s was what Chester Twp is today…less developed, pseudo-rural, long cumbersome commute at the end of the line, not convenient to major highways.
Zoom ahead to massive growth of the nearby NY metropolis, better transportation, and the development of Route 24. My in-laws house was bought for less than $100k in that time frame. As a knockdown it is now $900k. Nine-bagger. $800k insta-savings after tax.
My BIL’s house was purchased at $400k in the late 90s before the Midtown Direct. $1m+ now (adjusting value down for improvements). Three-bagger. $700k insta-savings.
My in-laws had no chance over my FIL’s adult life of generating $1.6m pre-tax free cash flow income from his W2. My BIL had no chance of generating $1.4m pre-tax free cash from his W2 over the last 20 years.
Yet he will be at $1m+ cash savings after tax on his property and his share of his parents. Purely from primary residence real estate appreciation. Absent that, his personal balance sheet would not be much different from some schlub in Columbus, OH.
What’s the point relative to the older woman in TX getting priced out by growth?
Why wouldn’t you want to move in to that type of situation? Of course you want to, you want the explosive increase in property values and amenities. You want to be near the ground floor. You want to move into the equivalent of Chatham c.1980 and ride it to Chatham c.2006 (or 2018). Catch the steep slope of the curve.
So, yes, other areas will pop like NJ has. Older, longer term residents will get priced out. New residents upwardly mobile will drive values especially if a nearby metropolis is growing. And the areas will become overpopulated driving down quality of life like in NJ.
But, if you don’t have family here or the inertial draw of NJ being ‘home’ why wouldn’t one consider such a move? Or, stated differently, you are being offered the opportunity to buy in Chatham now at the price c. 1980 by employing equity savings you already have. From a financial perspective who wouldn’t take that trade? Especially if the quality of life is an improvement over the horizon of your kids’ maturation?
No brainer it would seem.
Which is why most residents ‘rent’ this State for while and then GTFO unless they are attached by family or upbringing.
Now outside to garden. Good Saturday to all.
I was at $12k for a 3/2 with 1600 sq feet in a town with a “4” rated High school. Yeeesh
Our new place has an “8” rated HS, 2600 sq ft, 1/2 the tax bill and…a pool.
The problem I have with this tax scam is it’s letting the taxpayer pick and choose what rate they want to pay the who Trump tax cut was based on lowering the tax rate and doing away with the AMT in exchange for putting a limit on some deductions ,it seem some states want to pick what they want to deduct and pay lower rate as well …I’m sure people that try to game the system will be unpleasantly surprised …
Cal – you were in West Orange
A place that even by N.J. standards has absurdly high property taxes.
It’s Democrat desperation as they continue to find ways to screw the taxpayers.
Vote Blue to Receive Your Screw!
Lib: We are doing Costco Visa, Amazon Prime Visa, and Amex Starwood (soon to be Marriott)…… we don’t use planes that often, and I am loathe to look for airline comp.
Libturd says:
May 4, 2018 at 10:25 pm
In the CC game, it all depends on what you are after and how you value the rewards. I have no issue staying at a Comfort Inn and Suites when I vacation. Sometimes I prefer it. Some cards will get you a night or two at places that charge $1,000 a night. That’s how Gator and I honeymooned at the Princeville Resort in Kauai. Had we spent the same $3,000 on a different card, we could have probably stayed 20 nights at the Comfort Inn & Suites. It really depends on what you are looking for. The real key is to carry around about 10 different cards each which offer max points on particular purchases.
Currently, we carry the:
Amex Blue Cash 5% back at grocery, drugstores and gas
Costco Visa for 3% at restaurants
Discover for rotating categories and Discover rewards (great shopping portal for rebates)
Chase Freedom for rotating categories
Citi Double Cash MC 2% back on everything else
Barclays Ring Card – 0% interest on purchases for 20 months (for the furnace at the multi)
The federal deduction for state taxes empowers states to be careless with spending. If this deduction went away entirely, the federal government would be better financed and states would need to be more prudent.
The IRS has Three years to audit you from the time you file you taxes. However, their are exceptions to this rule. If You file a file a false Return, You can be audit at any time no limitation. even at 3 years with interest and penalties this could be painful …
Making money they don’t need. Why strive to make so much money if you are never going to use it? Pure genius. Waste your life accruing more and more money that you will never need or use…..definition of insanity. Sad part, they probably think they are so smart.
“People have held incomes and spending constant over time,” said Matt Fellowes, United Income’s founder and chief executive officer. “The wealthiest retirees are wealthier but are not spending more, relative to previous generations.” Fellowes believes many Americans are being unnecessarily frugal in their spending and are leading “overly contained” lives as a result. “
America Is Minting More Millionaire Retirees Than Ever – Bloomberg
https://apple.news/AFjp_EbkGTviuNabiOH7vVA
Pumps read my post again. You proved my point.
Cal and they would still be teaching those same kids from the crap school systems.
3b,
You seriously think all education is the same based on students attending college? Wtf? Do you know how many students go to college and fail out? Your basis of evidence is absolutely worthless in judging the quality of k-12 public education across states. Do you really think Florida is on par with Massachusetts and nj? Just look at the stats….rankings consistently put these states at the top, now why? Until you experience the education in some of these other states, don’t assume they are all equal.
Do you realize some states have a 79% hs graduation rate?
If you didn’t count the Abbott schools in nj, nj would be near 99%. Even with the abbotts, we do a damn good job. The poor kids in nj significantly outperform the poor in other states.
Pumps I give up!! For the love of God read what I wrote and try and comprehend the point I was making. Are you really that effing dense!!
Your point is pure bs on so many levels. So students attending state schools is the barometer for quality state education. Okay, got it, buddy!
“The student population in those state schools are overwhelming from in state. These students are products of those same primary schools deemed to be scrappy. Do you understand now?? Are you capable of connecting the last couple of dots?”
3B Pumps is right on this one.
A states high school performance has no impact into its State College performance.
Michigan and Texas. Mediocre High Schools, great State Colleges.
What you learn in HS is the foundation in College. Are you saying NJ HS Graduate acceptance is better than locals?
Michigan States Acceptance TOP 47% in SAT score
“A states high school performance has no impact into its State College performance.
Michigan and Texas. Mediocre High Schools, great State Colleges.”
Pumps/ fab If the bulk of the state colleges population is coming from the crappy state primary schools than that’s the student body those s schools teach too. I put 3 kids through college. I did all the research. And my point in all of this is to show how blinding and stupid that attitude is that many people ha have awful school systems and yet the majority of the kids in those state schools come from those awful systems. I understand pumps does not see the irony and the contradiction in that statement I thought better from you.
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2017 State Average SAT Score
https://blog.prepscholar.com/what-is-the-average-sat-score
Any area considered upper middle class will provide a good education because the parents will pay for the education through donation or taxes. I would assume this is how state colleges get filled in states with bad k-12 education.
So if you go to Florida, and don’t go to school in some area that is upper middle class or higher, you are screwed (almost entire state outside desirable areas is inhabited by demographics similar to Paterson or worse in earnings) You will still be paying nj tax prices because school funding is localized, and since these areas are not poor, they will pay for the costs associated with education.
Go ahead, look in the high rated school districts in any state, and look at the cost of housing and taxes in comparison to other communities in that location. It’s night and day.
When it comes to overall education, nj just beats out most states. We do a good job with every segment of the population. Other states forget about everyone but the ones with money. We also offer the best programs at the AP level. We also offer a ton of activities. Nj offers so much, you just don’t realize it, and take it for granted, as if this is the norm for every state. You should see our special education services in comparison to some of those cheap areas in other states, it’s night and day. Those low cost areas seriously don’t give a damn about the education of students, hence, how the cost is so cheap.
Pumps look at the SAT Scores. NJ is average
3b,
And we have kids go to Ivy League from our Abbott districts which are extremely poor, what’s your point? You still would not send your kids to these schools, right? Why? Now understand any low cost area is going to be inhabited by people that live in places like Paterson…. rich people don’t live in low cost areas, dude! They drive up the prices and taxes.
This is Florida. How is this any cheaper than the good parts of nj? Omg, low cost Florida has $33,000 property bills? How can this be? Are they paying the costs of nj govt union workers? This should be an example that govt union workers are not to blame for the high taxes…..what is to blame? Rich people concentrating in an area. Always drives up the cost of everything.
https://www.zillow.com/homedetails/3911-NE-26th-Ave-Lighthouse-Point-FL-33064/42932922_zpid/
3b says:
May 6, 2018 at 5:13 pm
Pumps/ fab If the bulk of the state colleges population is coming from the crappy state primary schools than that’s the student body those s schools teach too. I put 3 kids through college. I did all the research. And my point in all of this is to show how blinding and stupid that attitude is that many people ha have awful school systems and yet the majority of the kids in those state schools come from those awful systems. I understand pumps does not see the irony and the contradiction in that statement I thought better from you.
Poor kids take sat’s in nj. Kills our scores.
yome says:
May 6, 2018 at 5:26 pm
Pumps look at the SAT Scores. NJ is average
Other States do not have poor kids taking SAT?
Yome,
Mostly no. Our state is one of the few where almost all students take the test.
Pumps you keep proving my point . You really are a horses ass!
3b,
You accuse liberals of being a hypocrite, but you are the hypocrite. You claim good schools don’t matter, yet sent your kids to blue ribbon schools. Practice what you preach. You claim blue ribbon districts are overrated, yet you claim all three of your kids are successful college graduates.
Does not justify high cost property tax if basis for high SAT score is high family income
Rich spend on their kid’s education. So if you live in a rich area where parents value education, you will have high property taxes due to education being funded predominantly at the local level.
Unfortunately, nj is top 3 wealthy state. Follow the money. As 3b and others on this board refuse to acknowledge the association of rich and high property taxes. If you want cheap property taxes, you can’t live in areas with high concentrations of people with money aka the nice areas.
Yome says:
May 6, 2018 at 6:07 pm
Does not justify high cost property tax if basis for high SAT score is high family income
This is a cheap area in Florida. Only 914 in annual property taxes.
Would you honestly live here? Better yet, would you put your kid in this school system?
Cheap = no one wants to live there. High cost= everyone wants to live there.
https://www.zillow.com/homedetails/402-3rd-St-SW-FORT-MEADE-FL-33841/47399764_zpid/
Instead, people go on vacations to places like Sarasota and equate this with the rest of Florida. In their naive minds, they think these locations are low cost when in fact they are more expensive than nj.
https://www.zillow.com/homedetails/50-Central-Ave-17PHD-SARASOTA-FL-34236/70434337_zpid/
I have some family which lives in non tourist Florida. I gotta say I am very glad I grew up and went to school in NJ.
All have kids before marriage, some in drugs, etc.
I lived and went to school in Florida for 4 months in Winter Springs. The school was a trailer park because they couldn’t afford a building. They now have a massive modern high school that I believe was partially federally funded. Either way, education in Florida was about a year behind the northeast at 4th grade. I’d estimate they are 2 years behind by 12. Long story short, the deal on NJ education is that the suburbs are actually underfunded while the abbotts are massively overfunded. My school has nonstop leaking everywhere and I work in a town that is insanely wealthy. We spend far under the state average per student. People have the hardest time realizing that the local district isn’t really overspending. For some reason, the convoluted formula gives other towns nearly 3 times as much per pupil and it comes out of your pocket. It’s insane to argue that your local district needs to take a pay cut. The populace needs to start voting to get divert that money going to abbots back into their own backyard.
Maybe it’s time we try a non abott formula. You seem to have a firm grasp on the problems, and it makes sense. Could you imagine the impact on jersey suburbs? They would be state of the art with lower taxes. Talk about attracting wealthy families to our state. Really could be special and just what this state needs. The investments in abotts should provide a good foundation as we pull the rug away. If they want same funding, then raise taxes locally.
If we maintain abott type funding, all the money should go directly to teacher and technology in the classroom. Nothing else. That will be the best bang for the buck in this state’s educational investment.
same in Colts Neck…. and I have clients who work at the state level and can confirm everything you are saying…… the Abbotts are wasting money….. there are Newark school with the best high tech gadgets but the facility are so incompetent and lazy, they can’t be bothered to learn how to use these tools, so they remain unused gathering dust….
Blue Ribbon Teacher says:
May 6, 2018 at 9:03 pm
I lived and went to school in Florida for 4 months in Winter Springs. The school was a trailer park because they couldn’t afford a building. They now have a massive modern high school that I believe was partially federally funded. Either way, education in Florida was about a year behind the northeast at 4th grade. I’d estimate they are 2 years behind by 12. Long story short, the deal on NJ education is that the suburbs are actually underfunded while the abbotts are massively overfunded. My school has nonstop leaking everywhere and I work in a town that is insanely wealthy. We spend far under the state average per student. People have the hardest time realizing that the local district isn’t really overspending. For some reason, the convoluted formula gives other towns nearly 3 times as much per pupil and it comes out of your pocket. It’s insane to argue that your local district needs to take a pay cut. The populace needs to start voting to get divert that money going to abbots back into their own backyard.
Lib…
Why Costa Ricans are being paid to marry Chinese migrants – BBC News US
https://apple.news/A3RuW-VEkQs6pYUJB6BC1OQ
I don’t get why you New Jersey guys get all wrapped up about taxes. Here in MA we just elect Democrats for life and pay our bills, then go on enjoying our lives. It’s probably the same in your state, no?
Of course, we appreciate you sending your kids here for a four year vacation cruising in on boatloads of cash;-)
same in Colts Neck…. and I have clients who work at the state level and can confirm everything you are saying…… the Abbotts are wasting money….. there are Newark school with the best high tech gadgets but the facility are so incompetent and lazy, they can’t be bothered to learn how to use these tools, so they remain unused gathering dust….
Chi fi, is Colt’s neck’s building bad as well? Whenever I drive by it, it looks decent from the outside. Looks can be deceiving though.