Today, New Jersey, New York and Connecticut announced a lawsuit, filed in the Southern District of New York. against the Internal Revenue Service and Treasury Secretary Steve Mnuchin, challenging “new rules that would block states’ attempts to get around a new $10,000 cap for state and local tax [SALT] deductions.”
At the South Orange press conference today, New Jersey Governor Phil Murphy called the cap on SALT deductions — which has largely negatively impacted “blue” states that did not vote in the majority for President Donald J. Trump — “pure politics and the further weaponization of the tax code.” (The tax plan signed into law by Trump in 2018 limited the maximum SALT deduction to $10,000.)
New Jersey Attorney General Gurbir Grewal quoted Mnuchin as saying the rule was intended to “‘send a message’ to states like ours to pressure us to change our polices.”
Murphy was introduced by South Orange Village President Sheena Collum. Collum said that South Orange was a fitting location for the announcement because it ranked as the 15th highest taxed town in New Jersey with average household taxes at $18,000-plus per year. The Village President said that average would reach $20K as the tax levy for the recently approved $160M school district Long Range Facilities Plan took effect in the next three years. Collum called local tax rates “unsustainable” and said they were causing “a massive flight of our senior citizens,” as well as hurting the town’s ability to remain diverse and inclusive.
Also in attendance were Maplewood Mayor Vic DeLuca, Maplewood Deputy Mayor Frank McGehee and Maplewood Township Committee members Dean Dafis and Nancy Adams; South Orange-Maplewood Board of Education President Annemarie Maini and Board member Shannon Cuttle; South Orange Trustees Walter Clarke and Donna Coallier; and Assemblyman John McKeon.