Today, Congressman Josh Gottheimer (NJ-5) congratulated the New Jersey State Legislature — and the twelve co-sponsors in the Senate and Assembly — on taking the next step toward lowering taxes for New Jersey families and businesses by passing the New Jersey Tax Cut Bill in the State Senate and State Assembly. This bipartisan legislation will help deploy a tax cut for New Jersey families and businesses at the municipal level utilizing the charitable tax deduction— an idea Gottheimer and his team began working on at the end of 2017.
In January, in Fair Lawn, in response to the Tax Hike Bill that gutted the State and Local Tax Deduction (SALT), Gottheimer, and a group of local, state, and federal legislators, including then-Governor-elect Phil Murphy, joined together to introduce the new Tax Cut Plan for New Jersey. Gottheimer had also been working closely on the charitable tax deduction idea with Senate President Sweeney and Senate Budget and Appropriations Chairman Paul Sarlo.
Gottheimer and Rep. Leonard Lance (NJ-7) then met with Acting IRS Commissioner David J. Kautter to discuss the New Jersey Tax Cut Plan.
At the end of February, Gottheimer joined with Senator Sarlo and Senate President Sweeney on the idea in Paramus, ahead of the legislation passing the State Senate the following week.
The bipartisan New Jersey Tax Cut Plan restores the value of the State and Local Tax (SALT) Deduction by providing a tax deduction for taxpayers who make charitable contributions to their state or other local governments. Thirty-three other states — from Alabama to California to South Carolina — largely red states — have been using similar programs for decades now. In January, the nation’s top eight tax law experts affirmed the legal basis for the Tax Cut Plan and called its central mechanism a “correct and long-standing” principle of federal law (see their legal brief here).
“In New Jersey, our taxes are too high. The rates need to be lowered for families and businesses alike. But the Tax Hike Bill passed in Washington in December did just the opposite. Eliminating the SALT deduction is about a seven percentage point tax increase on many of the taxpayers in my District, making families and businesses less likely to come to our state, and more likely to leave,” said Congressman Josh Gottheimer (NJ-5). “Today’s passage of the overwhelmingly bipartisan New Jersey Tax Cut Bill through the State Legislature is the next step in the New Jersey Tax Cut Plan we introduced back in January. We now have a New Jersey Tax Cut Bill headed to the Governor’s desk, the last step to providing real tax cuts for New Jersey residents. I commend both Democrats and Republicans in the Legislature for their work on helping cut taxes in New Jersey.”
The Charitable Funds legislation was led by Senate President Sweeney and Budget and Appropriations Chairman Sarlo in the State Senate and Assemblyman McKeon, Assemblywoman Jasey, and Assemblyman Freiman in the State Assembly. Sweeney, Sarlo, and Assembly Speaker Coughlin have been key pioneers of the charitable idea.