Dec. 20, 2017
Bipartisan fight to stop the tax hike bill
This week, the House and Senate are voting on a tax hike bill, a massive tax hike on our families and businesses that, according to experts, will push jobs and people out of our state and property values down more than 20 percent. It’s a bill that’s being paid for on New Jersey’s back. That’s why so many of us — including nearly every Democrat and Republican in our congressional delegation, the New Jersey Chamber of Congress, and law enforcement — have opposed it.
We need tax cuts, at every level, and for every state. We need lower rates for Jersey families and businesses of all sizes. I’m not a guy who just says “no” — I look for bipartisan, common-sense solutions. As co-chair of the Problem Solvers Caucus, I’ve been working in a bipartisan manner to try to fix this tax hike bill. Rep. Leonard Lance, R-N.J., and I introduced our own tax cut plan to save the state and local tax deduction (SALT), cut the deficit, lower taxes on individuals and businesses, and preserve medical and student loan deductions. Our plan has the support of Republicans and Democrats from across the region.
I’ve met with the president, Speaker Paul Ryan, the chairman of the committee that drafted the legislation and scores of CPAs, business leaders, mayors and tax experts to help make our case for an actual tax cut. But the “moocher states”– those states that receive far more back for their federal tax dollar than they pay — are knifing SALT states, like ours, for their gain. They just think New Jersey is their piggy bank. As one Southern congressman put it to me, “This is our chance to stick it to the Northeast (even more).”
Here’s why this tax hike bill is coal in our Christmas stockings. It guts the state and local tax deduction, which kills our ability to deduct our state income taxes and sharply limits our property tax deductions, basically taxing us twice on what we make. It also eliminates home equity loan deductions, and cuts the mortgage interest deduction. SALT has been around since 1913 to protect states rights and to prevent Washington from undermining local priorities, like our schools and first responders. To boot, it adds $1.5 trillion to our national debt, at a time when the debt exceeds $20 trillion.
There are more “moocher states” than states like New Jersey that send more in tax dollars to Washington, D.C., than they receive back. One, Mississippi, gets back $4.38 for every dollar it pays in federal taxes; we get back only 33 cents. The moochers are lower cost states with far lower property values and state and local taxes. For example, Oklahoma City’s average property tax bill is only $1,450. You can see why these SALT deductions matter far less to them, and are so critical to us.
Eliminating SALT has us paying an even larger share for these “moocher states.” Here’s the problem for us — and for them. The top 10 SALT states, including New Jersey, pay 40 percent of all federal revenues. If this bill passes and raises our taxes and hurts our property values, foreclosures will go even higher, and many of us will owe more than our homes are worth. It will be another hit on our state’s economy, and the impact will ripple to the “moocher states.” That’s killing the geese that lay the golden eggs.
A bad tax climate will send retirees, jobs and businesses packing for lower cost states. Some will leave New Jersey and others will never come. Florida is already running ads encouraging businesses to move there. Fewer people and businesses means we will have less money to rebuild our crumbling bridges and roads, less for our schools, and less for law enforcement to fight terror and opiates.
I desperately want over-taxed New Jerseyans to get a break on their taxes and find incentives for growth. Lowering taxes on individuals and businesses, of all sizes, will make the U.S. more competitive and will result in keeping jobs here and bringing jobs back from overseas.
If this tax hike passes, we will look for new ways to cut taxes and help our residents, towns, and businesses find tax relief. After all, we’re from Jersey; we’ll keep fighting.