Burlington County Times

Rep. Tom MacArthur Lone NJ 'Yes' On Tax Reform 2.0

MacArthur, who is embroiled in a fiercely competitive battle to retain his 3rd District seat against Democrat Andy Kim, was one of 217 Republicans and three Democrats to vote in favor of permanently extending parts of last year's Tax Cuts and Jobs Act.

Burlington County Times — September 30, 2018

By David Levinsky

Republicans in the U.S. House voted Friday to push through legislation to make several components of last year's sweeping tax overhaul permanent, and once again Republican Tom MacArthur was the lone member of New Jersey's congressional delegation to vote in support of the measure.

MacArthur, who is embroiled in a fiercely competitive battle to retain his 3rd District seat against Democrat Andy Kim, was one of 217 Republicans and three Democrats to vote in favor of permanently extending parts of last year's Tax Cuts and Jobs Act. A total of 181 Democrats and 10 Republicans voted against the measure, which was part of a three-bill package of tax measures dubbed "Tax Reform 2.0."

The other two bills were passed by the House on Thursday to create new incentives for savings and the launch of start-up businesses.

Friday's bill was considered the most controversial of the three as it would make permanent many of the temporary components of last December's tax bill, which was approved by the GOP-controlled Congress without any Democratic support before being signed by President Donald Trump. Among the many changes, the law greatly reduced the corporate tax rate, lowered individual rates and enhanced standard deductions and the child tax credit.

Some of those reductions were made to sunset after eight years in order to blunt the bill's projected impact on the federal deficit. The new tax bill would eliminate those expiration dates and make the cuts permanent.

The bill would make permanent the tax law's controversial $10,000 cap on the state and local taxes deduction. The cap was added to reduce the overall law's expense but has drawn rampant criticism in New Jersey and other high-tax states, particularly from Democrats, who have argued the loss of the full deduction will hurt their states' economies and home values, and that it could force some taxpayers to pay more in federal taxes.

Just over 40 percent of New Jersey's taxpayers have traditionally claimed the deduction and the new limit was cited by New Jersey Democrats and Republicans like Leonard Lance, Frank LoBiondo, Chris Smith and Rodney Frelinghuysen when they voted against the bill last year.

This time around those four members also voted "no," once more leaving MacArthur as the sole member of the delegation to vote in favor of the legislation.

The 3rd District representative has steadfastly defended the tax law since last December and he continued to do so Friday, arguing that it has helped businesses grow and thrive both nationwide and in New Jersey. He also said the vast majority of New Jersey residents pay substantially less federal taxes because of it, even with the limit on the popular state and local taxes deduction, also known as SALT.

Recent IRS data shows the average New Jersey taxpayer who claimed the deduction in 2016 was able to write off more than $10,000, but MacArthur has argued that the increased standard deduction means the majority of state residents will benefit and that the reduced individual rates and child tax credit will allow most others to pay less to the federal government.

The left-leaning Institute of Taxation and Economic Policy predicted that 81 percent of New Jersey filers will pay less in federal taxes in 2019, and that 8 percent will pay about the same. About 11 percent will pay more, according to the group's analysis.

"On average, New Jersey taxpayers will see a federal tax cut of nearly $1,500 in 2018; more than half of our state's taxpayers will see a reduction of $2,740. That is real money making, a real difference in the lives of New Jersey families," MacArthur said Friday.

He also made the case that the SALT deduction would have been eliminated completely if not for the intervention of a small group of Republican lawmakers.

"At the beginning of the tax reform process, I worked with the White House and House and Senate leadership to make the bill better for New Jerseyans. I fought for our South Jersey seniors and those with high medical costs, and we expanded the medical expense deduction," he said. "The state and local tax deduction was slated to be zero, but I successfully preserved the deduction."

"The bottom line is that a vast majority of taxpayers in South Jersey have, and will continue to pay less in federal taxes, and will continue to benefit from provisions in this bill that help with medical costs, assist with the costs of child care, and lessen the tax burden on small businesses," he added.

Kim, a former national security advisor in President Barack Obama's White House, responded in a statement highlighting the fact that MacArthur was the only New Jersey member to vote in favor of extending the law.

"The fact that Tom MacArthur was once again the only New Jersey member of Congress to vote for capping state and local tax deductions shows how extreme he is," Kim said. "Today our Congressman voted to line his own pockets by prioritizing his corporate donors. I stand with the rest of the New Jersey delegation, including the other four Republican congressmen who voted against permanently taking away these tax deductions that New Jersey middle class families depend on."

The leader of New Jersey Citizen Action also weighed in Friday, saying MacArthur vote was an example of him supporting Trump's agenda rather than his constituents' interests.

"Tom MacArthur claims to be bi-partisan, but with this vote he shows he is a staunch Trump ally," said Ann Vardeman, program director with the liberal group.

The prospects of the legislation extending the tax cuts will become law this year seems slim as the Senate has not voted on it and seem unlikely to do so, given the slim Republican majority there and the ability of Democrats to filibuster.

The midterm elections are also around the corner and polls have shown only lukewarm support among voters for the tax changes.

The Associated Press contributed to this story.

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