House votes to approve sweeping tax reform bill; MacArthur lone NJ rep to vote ‘yes’
Read the full article Burlington County Times here.
Republicans muscled through their party’s sweeping rewrite of the nation’s tax code Tuesday, as House Speaker Paul Ryan and other Republicans dismissed criticism of the bill and insisted that “results are what’s going to make this popular.”
The vote was 227-203 and capped a GOP sprint to deliver a major legislative accomplishment to President Donald Trump after a year of congressional stumbles and nonstarters.
Senate Majority Leader Mitch McConnell, R-Ky., said the Senate would vote Tuesday evening, sending the legislation to Trump for his signature.
In a last-minute glitch, however, Democrats said three provisions in the bill, including one that would allow parents to use college savings accounts for home-schooling expenses for young children, violate Senate budget rules.
House Majority Leader Kevin McCarthy, R-Calif., said the House would vote on the package again on Wednesday, after the Senate removes the problematic provisions and passes the bill.
Among New Jersey’s 12-member House delegation, Rep. Tom MacArthur, R-3rd of Toms River, was the lone representative to vote yes. The other four Republicans voted no along with the state’s seven Democrats, with most citing the bill’s provision capping the long-standing deduction for state and local income and property taxes at $10,000.
The deduction is considered crucial in high-taxed states such as New Jersey; about 40 percent of the state’s filers claim it.
MacArthur, who originally voted no on a budget resolution because it eliminated the deduction, helped convince Republican leaders to retain it, albeit capped at $10,000. He has said that the vast majority of his district’s homeowners would fall under the limit, and that those who don’t would still benefit from the other changes.
“Sooner or later, facts win. Math wins,” he said. “You can like it or not like it, but sooner or later people are going to see a tax cut.”
Opponents countered that the benefits of the legislation overwhelmingly favor the wealthy and large corporations rather than smaller businesses.
“Today, Republicans in Congress chose to line the pockets of billionaires, the Trump family and big corporations at the expense of New Jersey families,” said Rep. Donald Norcross, D-1st of Camden. “The top 1 percent of Americans get 83 percent of the tax breaks, while everyday people who work hard, play by the rules and deserve a real raise in their paychecks get screwed.”
The massive $1.5 trillion package would touch every taxpayer and every corner of the economy, providing steep tax cuts for businesses and the wealthy and more modest cuts for middle- and low-income families. It would also push the national debt ever higher.
The standard deduction used by most families would be nearly doubled, to $24,000 for a married couple, while those who itemize would lose some deductions.
“We’re delivering a tax code that provides more jobs, fairer taxes and bigger paychecks to Americans across the country,” said Rep. Kevin Brady, of Texas, Republican chairman of the tax-writing Ways and Means Committee. “Our local job creators will see the lowest rates in modern history so they can invest more in their workers and in their future.”
Democrats called the bill a giveaway to corporations and the wealthy, providing little if any tax help to the less-than-well-to-do and no likelihood that business owners will use their gains to hire more workers or raise wages.
And the Republicans’ contention that the bill will make taxes so simple that millions can file “on a postcard” — an idea repeated often by the president — was simply mocked.
“What happened to the postcard? We’re going to have to carry around a billboard for tax simplification,” declared Rep. Richard Neal, of Massachusetts, the top Democrat on the Ways and Means Committee.
Tax cuts for corporations would be permanent, while the cuts for individuals would expire in 2026 to comply with Senate budget rules. The tax cuts would take effect in January. Workers would start to see changes in the amount of taxes withheld from their paychecks in February.
The bill is unpopular among the public, and Democrats plan to campaign against it in next year’s congressional elections. Senate Democrats posted poll numbers on the bill on a video screen at their Tuesday luncheon.
“This bill will come back to haunt them, as Frankenstein did,” House Democratic leader Nancy Pelosi said.
Not so, said Ryan, who has worked for years on tax overhaul.
“When we get this done, when people see their withholding improving, when they see jobs occurring, when they see bigger paychecks, a fairer tax system, a simpler tax code, that’s what’s going to produce the results,” said Ryan, R-Wis.
The bill would slash the corporate income tax rate from 35 percent to 21 percent. The top tax rate for individuals would be lowered from 39.6 percent to 37 percent.
It scales back a popular deduction for state and local taxes, repeals a key tenet of President Barack Obama’s Affordable Care Act, and allows drilling in the Arctic National Wildlife Refuge.
Despite GOP talk of spending discipline, it is projected to add $1.46 trillion to the nation’s debt over a decade. GOP lawmakers say they expect a future Congress to continue the tax cuts so they won’t expire. If achieved, that would drive up deficits even further.
Republicans acknowledged that they still have to convince many Americans of the benefits of their bill. Many voters in surveys see the legislation as a boost to the wealthy, such as Trump and his family, and only a minor gain for the middle class.
The $1,000-per-child tax credit doubles to $2,000, with up to $1,400 available in IRS refunds for families that owe little or no taxes. Parents would have to provide children’s Social Security numbers to receive the child credit, a measure intended to deny the credit to people who are in the country illegally.
The legislation also repeals an important part of the health care law — the requirement that all Americans carry health insurance or face a penalty — as the GOP looks to unravel a law it failed to repeal and replace this past summer.
The bill would initially provide tax cuts for Americans of all incomes. But if the cuts for individuals expire, most Americans — those making less than $75,000 — would see tax increases in 2027, according to congressional estimates.
The change to the state and local tax deduction was overwhelmingly the issue for the New Jersey Republicans who rejected the legislation, among them Rep. Rodney Frelinghuysen, R-11th of Harding, who chairs the powerful House Appropriations Committee.
In a statement, he said the cap on the deduction would cause taxes for some homeowners to rise and would damage the state’s housing market and business climate.
“I had hoped to be able to vote for a pro-growth tax bill. However, (the tax bill) forces New Jersey residents to pay for tax cuts for residents in other states,” Frelinghuysen said.
MacArthur said he was convinced the state’s economy and residents would benefit from the legislation.
“I wish more people were able to get past the politics of it,” he said. ” ‘No’ is an easier vote than ‘yes.’ … You can always point to something you don’t like in legislation. When you vote yes, you have to explain with a lot more detail why.”
MacArthur said he was able to “swallow” the cap on the state and local tax deductions because of the other components, among them the child tax credit, the increased standard deduction and the reduced rates.
“There are so many things that make people whole and beyond,” he said, adding that he was convinced the economic growth would exceed expectations and help the tax cuts pay for themselves without adding to the deficit.
“Nobody has a crystal ball. But I’m convinced this is a far better way to grow the economy than the status quo,” he said.
Democrats, who have targeted MacArthur’s district as one vulnerable in 2018, immediately launched a social media advertising campaign sending up Trump’s statement that the reform bill would be a Christmas gift for the American public. The ad features a stocking labeled “corporations” full of gifts and others labeled “families,” “middle class” and “seniors” that are empty.
“When House Republicans say ‘Merry Christmas,’ apparently it’s only to millionaires, billionaires and large corporations,” Democratic Congressional Campaign Committee spokesman Evan Lukaske said. “This tax scam is loaded up with special interest loopholes and tax breaks for the wealthiest and biggest corporations, while the middle class in New Jersey gets stuck with higher taxes and coal in their stockings. Americans are making a list, checking it twice, and will hold Rep. MacArthur responsible for this tax scam next November.”