FACT CHECK: Would New Jersey Be ‘Victim State Number One’ Under The GOP Tax Plan?

David Sivak | Fact Check Editor

The democratic nominee for governor of New Jersey Phil Murphy claimed Tuesday that “if the state and local deduction is eliminated, New Jersey is victim state number one.”

Murphy made the remark when asked about the GOP tax reform plan during a gubernatorial debate.

Verdict: False

New Jersey wouldn’t be “victim state number one” if Congress eliminated the federal deduction. It would, however, be one of the top states impacted.

Fact Check:

The state and local tax (SALT) deduction reduces the federal tax burden for largely upper-middle class and wealthy Americans who itemize their taxes. Since taxpayers can deduct state, local and property taxes from their federal returns, the deduction benefits residents in high-tax states to a greater extent.

New Jersey is among the most affluent states in the country and has one of the highest state tax rates. As a result, its taxpayers would be some of the hardest hit if the SALT deduction were eliminated.

In fact, 41 percent of New Jersey residents who itemize their taxes claim the SALT deduction – the third-highest proportion of any state. New Jersey residents also claim 5.9 percent of the deduction’s value nationwide; only California and New York receive a larger share (19.6 percent and 13.3 percent, respectively).

New Jersey may not be “victim state number one” if Congress removes the SALT deduction, but it would certainly be one of the states most affected.

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David Sivak

Fact Check Editor
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