NEWARK — Governor-elect Phil Murphy joined Democratic members of New Jersey’s congressional delegation on Monday to criticize a Republican tax plan that could potentially eliminate the State and Local Tax Deduction, a change that they say would harm members of the middle class in high-tax states such as New Jersey while giving tax breaks to the wealthy and corporations.
“This is a devastating bill for New Jersey,” Murphy said. “This is an assault on the middle class. This is an assault on seniors. Even the so-called compromise … is like cutting your hand off versus half of your hand off. It is bad no matter how you slice it. It is a devastating blow.”
President Trump has pledged to cut taxes, and two of his advisers, daughter Ivanka Trump and Treasury Secretary Steven Mnuchin, were in New Jersey on Monday with Rep. Tom MacArthur (R-3) to discuss the plan.
The House tax bill would reduce corporate taxes and double the standard income tax deductions in addition to eliminating SALT. After it was first introduced, representatives from high-tax states like New Jersey said that a compromise was needed to create tax fairness for states that give more money to the federal government than they receive. Republicans who favor the bill say that associated costs would generate corporate growth and infuse more money into the economy.
The liberal think tank New Jersey Policy Perspective estimated that the SALT deductions currently benefit nearly 41 percent of New Jersey households and that New Jersey would be among the hardest-hit states in the country if the plan goes through.
The House will likely vote on the tax plan this week, and all but two members of New Jersey’s 12-member congressional delegation — MacArthur and Rep. Rodney Frelinghuysen (R-11) — have spoken out against it.
Reps. Bill Pascrell (D-9), Albio Sires (D-8), Donald Payne (D-10), Donald Norcross (D-1) and Frank Pallone (D-6) all joined Murphy on Monday to criticize the plan. The other two New Jersey Democrats in the House, Reps. Josh Gottheimer (D-5) and Bonnie Watson Coleman (D-12), have also spoken out against the proposal.
Reps. Leonard Lance (R-7), Chris Smith (R-4) Frank LoBiondo (R-2) have also said the bill would be harmful to New Jersey.
“We as Democrats believe in fairness,” Pallone said. “We believe that we should be helping the middle class. Don’t try to throw this scam down our throats. … This is based on this trickle-down theory that if you cut taxes for the very wealthy and for the international corporations somehow that is going to trickle down and help the economy.”
Pascrell, a member of the House Ways and Means Committee, said that the cuts that go along with the bill could kick the can down the road and lead to a potential reduction in federal services down the line.
“When they can’t pay for this bill, they are going to come after Social Security, Medicare and Medicaid,” Pascrell said of Republicans. “There should not be one representative from the state of New Jersey who would even consider this bill. And if they are, why don’t they move? Either to another state or, perhaps, they would like to be a citizen of Moscow.”
While Democrats were in Newark railing against the tax plan, MacArthur and Gov. Chris Christie welcomed Mnuchin and Ivanka Trump to Ocean County to discuss the economic growth they believe the plan could bring to the United States. MacArthur has said he is working with other Republicans to preserve deductions for property taxes for New Jersey residents.
“I’ll vote yes, but I think our leadership in the House knows that if they come back to us with a bill that eliminates property tax, it won’t pass,” MacArthur said after the event, according to an Asbury Park Press report.
Democrats in New Jersey’s Republican-leaning districts have seized on MacArthur and Frelinghuysen’s stances on the tax plan.
“Instead of reforming our tax code to support the middle class, the Republican tax plan simply hikes taxes on New Jersey’s middle-class families in order to give huge tax cuts to big corporations and the ultra-wealthy,” said Mikie Sherill, a Democrat who is seeking to challenge Frelinghuysen in the 2018 midterms. “It also increases the tax rate on small businesses, the backbone of our economy, that generate two-thirds of new jobs across our nation.”
Andy Kim, who is seeking to challenge MacArthur, has said MacArthur is closely tied to Trump’s policies. Earlier this year, MacArthur was the primary architect of a failed bill that would have repealed and rewritten the Affordable Care Act.
“It has been quite a year for Tom MacArthur,” Kim said. “First, he sold out New Jersey families by writing a health care bill that would drastically raise premiums while cutting coverage, all to get a private fundraiser for President Trump. Now, he’s selling out middle-class families by signing onto a tax plan that will raise taxes for so many New Jersey residents, all to get a private invite-only event with Ivanka Trump.”