Ivanka Trump and Steven Mnuchin Press Tax Overhaul in New Jersey

By Kate KingFeaturesDow Jones Newswires

BERKELEY, N.J. -- New Jersey Rep. Tom MacArthur brought in the big guns on Monday as he sought to sell the Republicans' proposed tax overhaul to constituents in one of the country's most highly taxed states.

Treasury Secretary Steven Mnuchin and Ivanka Trump, the president's daughter and adviser, touted the two proposals under consideration in Congress, saying they are long overdue measures that would simplify the tax code and stimulate economic growth.

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The discussion came as Republicans in Washington, D.C., and Mr. MacArthur pushed for votes this week on bills that they hope will mark the GOP's first significant legislative achievement under Republican President Donald Trump.

Democrats and some Republicans from highly taxed states such as New Jersey, New York and California are opposed to the GOP's tax proposals, which would eliminate or cap deductions for state and local taxes.

In New Jersey, Reps. Leonard Lance and Frank LoBiondo have said they don't support the legislation under consideration in the House, which would cap the property-tax deduction at $10,000 and allow no deductions for state income taxes. The Senate's bill eliminates the deduction entirely.

Mr. MacArthur, a Republican who represents southern New Jersey's Ocean and Burlington counties, said he won't support the tax bill without a property-tax deduction, and believes the $10,000 deduction would cover "the vast majority of people in this state." He said the effect of taking away deductions for state income and sales taxes would be offset by lower rates overall and the elimination of the alternative minimum tax.

Federal deductions for state and local taxes make up 8.7% of adjusted gross income for New Jersey filers, according to an analysis by the Tax Foundation. Only New York taxpayers deduct a larger share of their adjusted gross income.

Mr. Mnuchin, a former resident of California and New York who said his first job was at his grandfather's glass bottle manufacturing factory in New Jersey, said he understands the plight of residents in highly taxed states. The Treasury has calculated that the proposed tax overhaul would deliver tax cuts for most families of four and people earning up to $300,000 in New York and New Jersey, he said. "For people who make $1 million in high-tax states, there will be a tax increase," he said.

Mr. Mnuchin and Ms. Trump discussed the tax plans in front of a largely friendly crowd of more than 100 in Berkeley Township, a shorefront community in Ocean Countythat was battered by superstorm Sandy. More than half of the town's residents are senior citizens -- many living on fixed incomes -- and tax deductions are important, Republican Mayor Carmen Amato said. "We have a lot of blue-collar residents paying $6,000 to $8,000 in (annual property) taxes," he said.He supports the House's proposed tax overhaul. "We really need tax reform in this country."

Mr. MacArthur said that if a deduction for medical expenses also is preserved, as the Senate bill proposes, most New Jersey residents should benefit. "I have gone through every tax bracket from the very poorest to the very wealthiest," he said. "I have yet to find anybody whose taxes don't go down."

Rep. Josh Gottheimer, a Democrat who represents parts of northern New Jersey's wealthy Bergen County, said his constituents would see tax hikes. More than half of the people living in his district pay more than $10,000 in property taxes, he said in an interview."There's no way to cut these numbers that it's not an increase on New Jersey and a huge favor to other states at our expense."

The average residential property-tax bill in New Jersey has increased 32% during the past decade, reaching $8,200 in 2016, according to state records.

Mr. Gottheimer, whose district includes many Republican voters, said he supports some aspects of the proposed tax overhaul, such as lowering the corporate tax rate, and measures that would encourage repatriation of cash held overseas. But any bill has to preserve the state and local tax deductions, he said.

Both Congressmen said they were concerned that the current tax proposals would eliminate the mortgage-interest deduction on second homes, which could affect real estate on the New Jersey shore. "I am continuing to fight that issue," Mr. MacArthur said.

Ms. Trump said she was happy that both proposals would expand the Child Tax Credit, which would increase from $1,000 to $1,600 under the House plan, or $1,650 under the Senate's version.

Republicans in the full House are preparing to vote on their plan later this week. The Senate, which released its proposal Thursday, began committee discussions Monday.

(END) Dow Jones Newswires

November 13, 2017 18:52 ET (23:52 GMT)