美国国家公共电台 NPR House GOP Tax Plan Is Little Help To High-Tax States Like New Jersey

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Senate Republicans are expected to unveil their version of a tax overhaul 1 today. Like the House bill that's already moving along, the Senate version is being touted 2 as a way to keep more money in Americans' pockets. But for millions of middle-income earners in high-cost states, the changes could eliminate big tax deductions 5. From member station WSHU, Charles Lane reports.

CHARLES LANE, BYLINE 6: Westfield, N.J., is one of the highest-taxed places in the country, so a tax cut sounded great to Kassie Smith, but the House GOP plan instead hit with a thud.

KASSIE SMITH: Well, I was hoping that they would give us more things to deduct 3 on our tax returns honestly because that would make us be able to stay here.

LANE: Smith is a bookkeeper, and her husband is an auto 7 mechanic. Because of the high cost of living in northern New Jersey 8, They've often talked about moving. But right now, they're doing what they can to keep school taxes down by organizing this garage sale to raise money for the high school football team.

SMITH: So they can get new helmets or new cleats or have breakfasts.

LANE: The Smiths pay nearly $12,000 a year in property taxes. Because they live close to New York City, there's a lot of density 9 and need for bridges and trains and police. Living near such an expensive big city also pushes incomes higher, even for blue collar workers, and puts them in a higher tax bracket. Being able to deduct local income and property taxes even things out, but reducing those deductions, as the House plan currently does, means no tax savings 10. In fact, the Smiths worry that their tax bill could go up.

SMITH: I'm not going to tell my boss, oh, my taxes went up $600 this year, you need to give me $600 more in pay.

LANE: Six-hundred dollars is probably on the low side. An analysis by the Tax Policy Center, a research group, suggests that while most Americans will see a tax cut, almost 10 percent of middle-class workers will see an immediate 11 increase of more than $1,000. But the Smiths and others in high-cost states like New Jersey, Connecticut, Massachusetts or Virginia could see higher increases. Libertarian Walter Luers says maybe that's a good thing in the long run.

WALTER LUERS: Other states would say we have too much government here in New Jersey.

LANE: Luers is with the New Jersey Taxpayers 12 Association and has been pushing to lower property taxes in New Jersey. Some argue that losing these deductions just might finally push local tax rates down. Also, why should taxpayers in Wichita subsidize public pensions in New Jersey?

LUERS: Someone from, say, Oklahoma or Texas or Kansas will say, well, look, your property taxes are much higher. And you have a higher level of service, so you're kind of getting what you pay for over there.

LANE: This is exactly what worries left-leaning groups. Jon Whiten runs the New Jersey policy perspective and fears that without these deductions, voters will revolt against local taxes, depriving local governments of resources.

JON WHITEN: It would be one thing if they were taking away this deduction 4 and wrapping up investments that were going to come to state and local governments, but they're taking away this deduction and cutting taxes for the wealthiest Americans and for large corporations.

LANE: Under his analysis of the House Republican plan, the country's top 5 percent would net more than 60 percent of the tax cuts. However, another research group, the Tax Foundation, says that cutting the corporate 13 tax rate will eventually increase GDP growth and boost stock prices and create almost a million new jobs. For NPR News, I'm Charles Lane.

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