Because of the new federal law, the president of New Jersey’s Senate told the New York Times he’s “pressed the pause button” on a proposed new tax on millionaires.
The SALT cap would increase the tax burden on these wealthy households by an average of $71,200, Mass. Budget says, compared with an average $167,000 cut as a result of the other tax changes. Here’s the group’s chart:
The report came hours after a separate analysis, from the business-backed Massachusetts Taxpayers Foundation, found that the state’s residents in 2015 deducted from their income $19 billion in state and local taxes, and that about $7.5 billion in deductions will no longer be available, with the new federal law in place.
In a statement this week, Speaker Robert DeLeo said the Massachusetts House is “exploring options to mitigate negative repercussions” stemming from the Republican tax law, with a focus on the SALT limit.
If the people of Massachusetts decide that investing in education and transportation is more important than large tax cuts for our highest-income households, we could adjust our state tax system so that people with incomes over a million dollars pay more in state taxes while they are paying less in Federal taxes. The Fair Share amendment, which adds a 4% tax on income over a million dollars, would have that effect.
The foundation warned in its report that the SALT limit “could make Massachusetts a less attractive place to work and live.”
Among its provisions, the law signed by President Trump late last year established a $10,000 limit on the deductibility of those state and local taxes (SALT) — a cap that’s drawn much attention, especially in states with relatively high taxes and housing costs.