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New Jersey joins in tristate lawsuit to overturn tax reform

By , - Last modified: January 26, 2018 at 12:31 PM
“This tax reform bill has nothing to do with sound policy. It is clear: it is punishment.” - NJ Governor Phil Murphy
“This tax reform bill has nothing to do with sound policy. It is clear: it is punishment.” - NJ Governor Phil Murphy - ()

Groups in New Jersey are hailing a tristate lawsuit to overturn and repeal the Tax Cuts and Jobs plan passed last month in the U.S. Congress.

Gov. Phil Murphy said Friday the state has formed a coalition with New York and Connecticut to bring the lawsuit in federal court, asserting a limit on property, state and local tax deduction caps that unfairly hurt the three states, given they each have some of the highest property tax rates and real estate values in the country.

In a public statement, Murphy said that the governors of all three states are still formulating a plan on how and when the suit will be filed.

“This tax reform bill has nothing to do with sound policy,” Murphy said. “It is clear: It is punishment.”

New York Gov. Andrew Cuomo and Connecticut Gov. Dannel Malloy, both Democrats, echoed Murphy’s sentiment.

“There is a very strong argument that the bill is a fundamental violation of states’ rights and repugnant to the very concept of federalism that formed this nation,” Cuomo said in a prepared statement.

Added Malloy: “This is an assault on our states. I believe it is illegal. It is why we are standing up and saying that this can’t happen.”

Jon Whiten, vice president of New Jersey fiscal watchdog New Jersey Policy Perspective, said his group, a state fiscal watchdog, is throwing its support behind the suit.

“We welcome this coordinated legal action … but it’s also important that New Jersey continue to guard against the very worst effects of the federal bill – which, in fact, go far deeper than the cap on state and local tax deductions,” Whiten said. “In fact, this plan delivers lopsided tax breaks to the wealthiest Americans and large corporations, while teeing up deep and devastating budget cuts that will harm working families across New Jersey, as well as the state’s budget.”

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Vince Calio

Vince Calio

Vince Calio covers health care and manufacturing for NJBIZ. You can contact him at vcalio@njbiz.com.

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mg February 5, 2018 8:52 am

Governor Murphy don't forget you represent the ENTIRE state of NJ. Many of us in Central and Southern NJ have real estate taxes well below the cap. Your lawsuit will cost us more state tax dollars to support and in the end look to overturn a federal tax plan that gave us more discretionary income.

jag January 26, 2018 2:23 pm

How can NJ sue the feds when they have their own $10,000 cap on property tax deductions.

until NJ cleans their own mess up, this is diversion and a waste of taxpayers money

Steve January 26, 2018 2:35 pm

Yes, because it makes more sense to this idiot to waste more of the taxpayers money with a lawsuit instead of trying not to have New Jersey be the highest property taxed state in the nation

Mike C January 26, 2018 2:36 pm

This is a joke right ... They burden us tax payers with high property taxes and income taxes and they want to make a federal case out of it .. The courts will laugh this suit out of the courts but, hey they will waste time energy and taxpayer money fighting against this ... god help us with Liberals

BOB F January 26, 2018 2:47 pm

Mr. Murphy. N.J. has made this bed over many decades of liberal spending, socialism and gov't waste & corruption. Now lie in it.

cc Calif - Illinois - Conn.

EJ January 26, 2018 3:16 pm

Murphy and co will lose. Bunch of pathetic leftists that they are. They are on the wrong side of history.

Dimitri January 26, 2018 3:30 pm

No tax cut for you! That's right, how dare you keep your hard earned money. It belongs to us and the public sector unions.

Mark C January 26, 2018 3:43 pm

The last person quoted, John Whiten, is clearly politically biased. 92% of American's, including those in these 3 states (I'm in NJ) end up better off under this plan. The millions of people already getting large bonuses weren't even accounted for when the plan's benefits were calculated. The amount of industry this will bring back to the US will far outweigh any property/state tax caps.

In addition, many of us in these higher income states, under the prior administrations tax laws, were subject to the cruel AMT (Alternative Minimum Tax) which meant we could deduct 0 in state and property taxes, so now with the AMT seriously curtailed, the $10k is better than the 0 we had before.

I wish these governors would focus on WHY we have the highest state and local taxes in the country and why, for example, it costs more per mile to maintain NJ roads than 49 other states.

That's the real crime here...

MyOpinion January 26, 2018 4:22 pm

Sad to see NJ involved in this liberal cooky lawsuit. How much double talk can there be in a single article. They are filing the lawsuit because people with property taxes that exceed the cap will pay more tax. But the people that exceed the property tax cap obviously have higher property value and thus income/net worth. Then in the next breath they are saying that the tax cut has too much benefit on for the wealthy. So they want to file a lawsuit to change the property tax deduction so people with big expensive houses pay less, right? Stupid.

How about focusing on the the high tax problem in NJ Murphy. Clueless. Murphy's cure all is to sell and tax dope. Of course that is going to bring about the extra production the state needs to grow and prosper. He must be smoking dope when coming up with these ideas.

mrdirt January 26, 2018 6:40 pm

Waste of time and Money. The 16th amdndment gives congress the authorization. Murphy should spend his time looking at ways the State can reduce tax burden.