Report Says Trump Tax Cut Hurt NJ: Here's How

NEW JERSEY – If you live in New Jersey, you were hurt by the Trump tax cut, a new report says. And the main reason cited is fairly simple:

Your home's value probably didn't rise as fast as you wanted. It fact, it may have sunk, making life much harder for "middle-class" homeowners who were trying to sell their house. And it may have impacted your taxes in a bad way, too. Read more: Here's How Bad NJ Is For The Middle Class

New Jersey was among a group of states hurt by the 2017 Tax Cuts and Jobs Act's $10,000 cap on state and local tax (SALT) deductions, according to a report from Fitch Ratings, a financial advisory publication. President Donald Trump signed the bill into law two years ago.

Besides New Jersey, other states identified in the report as having been hurt by the Trump tax law were California, Hawaii, Connecticut, Massachusetts, New York, Maryland, Washington, New Hampshire and Rhode Island.

Accoring to Fitch, the average home price appreciation in those states dropped from 6.5 percent in December 2017 to 2.5 percent in September 2019.

Here's how the act also hurt New Jersey, according to the report:

• The act greatly reduced the amount of housing debt eligible for interest deduction.
• That reduction slowed home price growth.
• Rising mortgage rates and a larger inventory of high-priced homes were contributing factors to slowing home price growth.
• There were even price declines observed in the areas where SALT deduction amounts were prevalent.
• High-income taxpayers were most affected by the change in the SALT deduction

You can read more about the impact here.

Home values weren't the only things impacted, other reports have said.

A NJ Spotlight report also said the loss of the federal property tax deduction could mean a loss of as much as $21,500 in write-offs for the average New Jersey taxpayer. And taxpayers in some New Jersey towns will have to pay more — a lot more — than others.

NJ Spotlight has provided a map that shows how much towns have lost (see below). The map shows that taxpayers in Short Hills, where the average property tax was $28,000 before the act, could be hurt more than anybody else, according to NJ Spotlight, while Trenton would be hurt the least.

Here is the map — float your cursor over your town and ZIP code to see each community's total state and local tax deduction and its average adjusted gross income, and click on your town to see the average individual tax burden: