From the Star Ledger:
Efforts to restore the full federal deduction for state and local taxes have run into opposition from some Senate Democrats who want to limit the tax break to middle-class taxpayers.
One possible compromise circulating on Capitol Hill would do just that — and it would cut taxes for 96% of New Jerseyans, according to a recent study.
Under the proposal, taxpayers making up to $400,000 would be able to deduct up to $80,000 in state and local income and property taxes. The $80,000 figure is included in the House-passed 10-year, $1.75 trillion social spending bill, with no income limit.
In New Jersey, that proposal would give 91% of the benefits to those making $400,000 or less and the remainder to those making between $400,000 and $475,000. Under the House-passed provision, 44% of the benefits would go to those making $400,000 or less, 8% to those making between $400,000 and $475,000, and the remaining 48% to those making more than $475,000.
Menendez, for example, has suggested setting the income limit for increasing the deduction for state and local taxes at $550,000 rather than $400,000.
“I’m pretty much where I’m going to be,” he said. “If you’re in New Jersey and you’re making 550, you’re not rich. Those families should be taken care of.”