NJ Governor and Attorney General Launch another Ludacris Lawsuit Against the IRS

the staff of the Ridgewood blog

SOUTH ORANGE NJ, Governor Phil Murphy and Attorney General Gurbir S. Grewal embark once again on a fool’s errand,. In a press release Wednesday and claiming ,”Acting to protect state taxpayers from the Trump Administration’s repeated efforts to unfairly target them, Governor Phil Murphy and Attorney General Gurbir S. Grewal today announced that New Jersey has filed a federal lawsuit against the Internal Revenue Service (IRS) and the U.S. Treasury Department.

Filed in the U.S. District Court for the Southern District of New York, the lawsuit seeks to strike down a new IRS rule that would prevent New Jersey residents from obtaining a full federal charitable deduction whenever they contribute to local governments and other qualifying institutions and receive tax credits in return.”

Other high tax states of New York and Connecticut joined the lawsuit, which Governor Murphy and Attorney General Grewal announced at the South Orange Fire Department.

“This is not a fight we asked for, but it is one we are proud to wage – on behalf of our taxpayers, and the countless others in our fellow states who are realizing now that they are financial collateral damage to the Trump administration’s rank politicization of the tax code,” said Governor Murphy. “We are committed to fighting Washington to end this unfair and unconstitutional tax on New Jersey’s taxpayers.”

The press release goes on to say, “Our message to the IRS today is simple. No matter how many times you change your rules – from capping the SALT deduction to reversing your longstanding approach to charitable donations – we will challenge you in court,” said New Jersey Attorney General Grewal. “Our residents already pay more to the federal government than we get in return. That is why I remain committed to standing up for New Jersey taxpayers in the face of this onslaught coming out of Washington.”

The federal government began targeting states like New Jersey two years ago when it enacted a 2017 tax overhaul that placed, for the first time, a $10,000 cap on the federal deduction for state and local taxes (SALT). The SALT cap disproportionately harmed taxpayers in New Jersey, Connecticut, and New York.

At the time, U.S. Treasury Secretary Steven Mnuchin – named as a defendant in today’s lawsuit – confirmed that the SALT deduction cap was intended to “send a message” to states like New Jersey that they would need to change their tax policies.

So who really benefits the most if the new $10,000 cap is rolled back? According to a recent analysis by the D.C.-based Tax Foundation, scrapping the SALT deduction cap would help the top 20% of taxpayers and very few others. In fact, the biggest winners would be in the fabled top 1% of federal taxpayers.

Politicians in Trenton should focus more on helping New Jersey Taxpayers by cutting spending and cutting taxes . New jersey lags in virtually every economic category and is branded as an anti business state . Wasting money on fantasies fighting the IRS is ridiculous and does nothing to help the state of New Jersey.