Tax bill will make home prices plunge, says NJ congressman
- The Republican tax reform plan will "kill" property values in New Jersey and raise taxes, Rep. Josh Gottheimer, D-N.J., told CNBC on Tuesday.
- While he supports tax cuts, Gottheimer said he has an issue with the changes to state and local tax deductions.
- "This is an assault on New Jersey, another nail in our coffin," he said.
The Republican tax overhaul plan will "kill" property values in New Jersey and raise taxes, Rep. Josh Gottheimer, D-N.J., told CNBC on Tuesday.
While he supports tax cuts, Gottheimer said he has an issue with the changes to state and local tax deductions. New Jersey is one of the highest taxed states in the country. New York and California are also expected to be hit hard by the changes.
"This is an assault on New Jersey, another nail in our coffin," he said in an interview with "Power Lunch."
The original Senate bill proposed eliminating the ability to deduct all state and local taxes (known as SALT), but a last-minute amendment allows the deduction of up to $10,000 in state and local property taxes.
The House bill repeals the SALT deduction except for property taxes of up to $10,000.
Gottheimer believes the plan, which he called a "tax hike on New Jersey," will send jobs, people and businesses fleeing the state and will cause housing prices to plummet.
"People are calling our office off the hook," he said. "They think property values will go down somewhere between 15 and 20 percent."
"It also resets what you can suddenly afford every year," he added, noting that residents will have less money at the end of the year.
About 60 percent of homeowners in the state currently use the SALT deduction, according to Gottheimer. It will go down "a little bit" with the changes, "but not that much," he said.
The median home value in New Jersey is $315,900 and has annual taxes of $7,410, according to WalletHub.
He also argued that New Jersey is already paying more of its fair share in taxes.
For every dollar the state sends to the federal government, it gets back 33 cents, Gottheimer said.
"You look at Mississippi, they get back $4.38. So you've got a bunch of moocher states out there that are already taking from us and now they're trying to pile this on our backs too and increase our costs."
Supporters of the SALT elimination have said it would create a more level playing field among the states.
In an interview with "Power Lunch" last month, Sen. David Perdue, R-Ga., said, "There's no reason in the world … that a couple with two children in Iowa pay more federal tax than the same couple with two children, same income, same deductions, in California."
The Senate and the House must reconcile their bills before sending a final version to President Donald Trump to sign into law.