On your Federal income tax return for many years you have been able to deduct state and local taxes for Income Tax (or General Sales Tax) and Real Estate Taxes. In our high tax state this can easily exceed $10,000 of lost federal deductions. Eliminating these deductions was included in Trump’s original budget proposal and included in the Senate’s Budget Resolution which the House this morning approved and Trump will sign. Frelinghuysen’s YES vote in support of the resolution was particularly disheartening because it passed very closely 216 to 212.
Had the House defeated the resolution and then created its own alternative there would have been a reconciliation process with the Senate which might have re-instituted the deductions. The resolution in general does little for the poor and middle class and enriches the already rich. The resolution also reduces the number of votes needed in the Senate from 60 to 50 (+ V.P. Pence) to pass the upcoming tax bill, making it all the easier for Republicans to get it enacted.
All hope is not lost. The next step is finalizing the tax “reform” package and voting on it. This is another opportunity, which with slightly more support from Republican Representatives, could re-institute our deduction in the House. As people say, “Tax reform is not easy.” Nonetheless, Trump and Republican varmits who failed to end the ACA and have yet to pass a major piece of legislation are panting for a big win.
Work on the package has already started. Although the tax bill is not yet posted, theoretically approval could come as soon as in a week or two if Republicans in both houses have the vote. More likely it will be a protracted effort as lobbyists and advocates fight for benefits they feel are important. Indeed, there could be so much controversy that Republicans in the Senate, who have a slim majority (52 to 48), cannot gain enough support to pass the bill. In such a case they would have to negotiate with Democrats which would assure a better outcome.
In the meantime individuals and activist groups should send a strong message to Rep. Frelinghuysen. We thank Leonard Lance, Chris Smith, Tom MacArthur, and Frank LoBiondo for voting against the resolution. However, we must continue pressure on them to fight for inclusion of the deduction in the final tax bill.
For more information see Blue Jersey’s Fight back: Congress deals a blow to NJ taxpayers and seeks to further enrich the already rich