Mac to NJ US Senators: Explain in Toms River why tax plan is bad

WASHINGTON - After being pilloried by New Jersey Democrats and others who oppose federal tax reform legislation now being organized, shore Congressman Tom MacArthur (R-3) dares New Jersey's three leading Democrat figureheads to hash out the issue from both sides, on his home turf.

Governor-elect Phil Murphy and U.S. Senators Robert Menendez and Cory Booker (D-NJ) received the challenge today, following weeks of withering statements that MacArthur contends are a political vehicle, with facts occupying the back seat, or maybe hanging onto the roof as it speeds along.

In Newark today, Menendez, Booker and Murphy merged their priority lists for the Garden State, under the rubric of a new federal-state partnership with the Murphy administration.

Aside from federal tax reform, topics reportedly included the Gateway trans-Hudson tunnel project, public safety, health care, and concealed-carry reciprocity legislation moving through Congress, also supported by MacArthur.

The Republican, who has taken an active role in the House tax-reform version that is now being merged with the Senate version, and also in the sidelined Obamacare replacement plan, bids them to present their cases in Toms River.

Supplemental details supplied by MacArthur's office pointed out that the tax plan which got his vote allows the same property-tax deduction on federal tax forms as on state forms, which he says has received no Democrat opposition.

This is contrasted with a 1996 state measure that reinstated graduated property tax deductions from gross income taxes, consisting of 50 percent of $5,000 in year one, 75 percent of $7,500 in year two, and up to 100 percent of $10,000 in year three.

The state bill won support of 13 Democrats, including now-North Jersey Representative Bill Pascrell.

An inquiry to Senator Menendez's office, regarding whether he would take up the challenge, has so far gone unreturned.

MacArthur's memo, in its entirety:

December 11, 2017

Dear Governor-Elect Murphy, Senator Menendez, and Senator Booker,

Instead of working to deliver real tax relief to New Jerseyans who deserve it, you have all decided to embark on a dishonest campaign intended to mischaracterize the tax reform legislation working its way through Congress for partisan political gain.

Our shared constituents deserve better. They deserve the truth.

New Jersey is among the highest-taxed states in the nation and a recent study ranked us as the worst state in America for out-migration. Retirees, millennials and families are leaving New Jersey in droves because they can't afford to stay. That crisis has zero to do with a federal tax reform bill that hasn't become law yet.

Worse, it has become abundantly clear that you have not done any real analysis of this plan, outside of parroting partisan talking points. So, allow me to educate you about why the Tax Cuts and Jobs Act is good for the constituents of New Jersey's Third Congressional District.

Right off the bat, more than half of my constituents take the standard deduction, which doubles in the legislation I supported. Nearly 70% of taxpayers across the country use the standard deduction, while high-income earners are more likely to itemize.

Furthermore, the median family with two kids in NJ-03 makes $110,620. Under current law, this family pays $7,469.94. Under the House bill, they'd pay $6,460.26 - a tax cut of $1,000. This doesn't even include the other benefits they may experience if they run or work at a small business, or if they work at a company that will now invest more in the New Jersey instead of overseas.

Here are some other benefits of this bill:

- An increase in the child tax credit. Over 48,000 families in my district currently claim the child tax credit. Under this legislation, each of these families would receive an additional $600 per child, plus more families would be eligible for this credit.

- The creation of a non-child dependent tax credit. This would provide families who are caring for an elderly parent with more money in their pocket.

- Giving small businesses the lowest tax rate since World War II, which will help Main Street businesses from Toms River to Willingboro.

- Lower tax rates, which will enable our shared constituents to keep more of their hard-earned money.

As for the $10,000 property tax deduction, months ago some in my own party wanted to eliminate it entirely. Instead of bloviating in press releases and grandstanding at press conferences, I negotiated with The White House and House Leadership, and successfully restored the property tax deduction, which will benefit all New Jersey property owners to the tune of $3.6 billion per year.

I find it interesting that you oppose my efforts, yet New Jersey has the same cap and I haven't heard any of you say a word about changing it.

My district voted for Barack Obama in 2012, Donald Trump in 2016, and Kim Guadagno in 2017. Donald Trump won Ocean County by 90,000 votes, while Hillary Clinton won Burlington County. Despite its "swing district" status, I have won two races by double digit margins here because I consistently work across the aisle to fix the tough problems facing our nation. The Lugar Center ranked me among the top 15% most bipartisan Members of Congress, while Senators Menendez and Booker are found in the bottom third.

So, when Barack Obama had a plan in place to close military bases like Joint Base McGuire-Dix-Lakehurst, which would have devastated our economy and military readiness, I stood up and won for South Jersey. When Donald Trump proposed major budget cuts to the Office of National Drug Control Policy, which would have hurt our efforts to combat addiction, I stood up and won for South Jersey.

I invite you to come explain to the middle-class family in Toms River, who would see a $1,000 tax cut, why you believe the government deserves their money more than they do. You criticize Republicans for fear-mongering, divisiveness, and spreading mistruths, yet you are engaging in the same exact behavior as it relates to tax reform. It's not right when Republicans do it, and it's not right when you do it either.

Sincerely,

Tom MacArthur"

Within an hour of MacArthur's missive, the Greater Toms River Chamber of Commerce (GTRCC) issued its position - that tax reform is good, just not this kind of tax reform.

The Chamber's statement:

"If you are following the news in recent weeks, there is no doubt that you have heard details outlining the pending tax reform legislation.

The Greater Toms River Chamber of Commerce business community supports tax reform, but we cannot support the proposed legislation in its current form. 

While the proposal may result in a net positive for the Country, that would not be the case at the State-level for people of New Jersey.

Some of the direct downsides of the proposed legislation include the elimination of state and local tax deductions and limiting the property tax deduction to $10,000 (per the House GOP proposal - the Senate is looking for a plan that eliminates credits and deductions altogether).  Additionally, there are various business industries that would, specifically, be harmed by the proposed legislation including the healthcare and higher education sectors. 

One of the largest, indirect, downsides of the proposed legislation is the continued, and potentially increased, outmigration that we are seeing  Outmigration results in the loss of jobs, economic activity, labor income, and household income.  Already staggering statistics put New Jersey near the top of the list for the highest, domestic, outmigration in the United States year after year. 

We support new jobs, developing a skilled workforce, and lowering the tax burden.  Seeing too many obstacles for the people of New Jersey to financially overcome with the proposed legislation, we cannot support it in its current form, and look forward to resolutions that will ensure that New Jersey is affordable and competitive moving forward."

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