President Trump administration officials and members of Congress are implying that high tax states are getting an unfair advantage because taxpayers in those states are able to deduct their high property taxes and state income taxes from their federal tax returns.
The irony is that those states get the least return of federal funds of tax dollars sent to Washington, D.C. According to the most recent studies, one year the variation ranged from 61 cents to 2.02 dollars and another year the variation ranged from 50 cents to 3.33 dollars returned to the states. New Jersey was listed as the lowest at 61 cents and 48th out of 50 in the other year.
To put it in prospective, to make New Jersey even, the federal government would have to send New Jersey an additional $15 billion or more. New Jersey’s budget for 2018 is $36 billion. If the federal government sent an additional $15 billion, the state could eliminate the state income tax or eliminate the sales tax and cut the income tax by 33 percent.
According to the studies, approximately 17 states subsidize the other 33 states. The reason New Jersey is the highest taxed state is not necessarily because the state and local governments are doing anything wrong, it is because New Jersey is carrying the heaviest burden of federal expenditures. A segment of Texas residents has been talking about secession and their state is for all intents, even. Ironically there is not a peep from New Jersey residents.
Joseph Lamb Sr.
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