New Jersey Bankers Association President John McWeeney Jr. and Congressman Josh Gottheimer Speak About Their Joint Opposition to the Tax Hike Bill.
Today, Congressman Josh Gottheimer stood with New Jersey Bankers Association President John McWeeney Jr. at the Columbia Bank Corporate headquarters in Fair Lawn, New Jersey to firmly oppose the Tax Hike Bill making its way through Congress and warn about the dire consequences that this bill promises to unleash on the Financial Sector in the Northeast.
Rep. Gottheimer also expanded on the alternative, bipartisan Gottheimer-Lance Tax Cut solution, proposed last week, which preserves SALT and the Mortgage Interest Deduction while cutting taxes for hard-working New Jersey families and small businesses.
The New Jersey Bankers Association made headlines by breaking with their National Association in opposing the Tax Hike Bill. They join the New Jersey Chamber of Commerce, New Jersey Realtors, and nearly every Congressional Republican and Democrat from the State of New Jersey, among many others, against this proposed Tax Hike.
Said Congressman Josh Gottheimer (NJ-5), “Let me tell you what I’m for — I want actual tax cuts for New Jersey families, and businesses of all sizes. I’ve been working since I was elected, in a bipartisan way, to get there. I am working across the aisle — and the Capitol — to do everything in my power to stand up for New Jersey against the Tax Hike Bill, because it will jack up our tax rates, eliminate key state and local and home ownership deductions, ruin our property values, and likely send people, jobs and businesses fleeing from our state. As the NJ Bankers aptly put it, the Tax Hike Bill is ‘bad for our members because it’s bad for our customers and bad for New Jersey’s economy.’ I believe it could trigger another recession here in the northeast and, ultimately, across the United States.”
In addition, Gottheimer said: “The result: they treated New Jersey like roadkill, pushed to the side of Route 80.”
Continued Gottheimer, “Rep. Leonard Lance and I drafted a bipartisan tax cut plan that preserves SALT and saves the Mortgage Interest Deduction. The plan would retain the same basic rate structure as the Senate bill, including doubling the standard deduction, lowering rates for individuals and reducing the top tax bracket. It would keep our housing market on the road to recovery and preserve the ability for banks — like this fine one here today — to invest and spend on our people and our communities.”
Said John McWeeney, Jr., President and CEO of NJ Bankers, “We are here this morning to show our support for Congressman Gottheimer’s efforts to try to achieve some change in the federal tax reform that is currently being debated in Congress. Certainly the New Jersey Bankers Association supports the concept of tax reform — simplifying the tax code, lowering both corporate and personal income tax rates. But not on the backs of New Jersey citizens. In particular, we are concerned about the fact that the state and local tax deductions are going to be eliminated or minimized. The same is true for some mortgage interest deductions — for home equity loans. We think this is going to have a very negative effect on New Jersey citizens at a variety of different income levels, both middle income people as well as more affluent people, which may contribute to the flight — the outmigration of New Jersey’s citizens. And perhaps most damaging of all, the impact on New Jersey’s property values. And our economy here in this state is built so much around real estate, both commercial and residential real estate. So we have some real concerns, and we’ve been outspoken about that and we’re trying to support the Congressman in his efforts and hopefully we can achieve some changes that will make tax reform a win for everybody, not just certain parts of the country.”
To view video of the event, please click HERE.
Gottheimer’s remarks as prepared for delivery are below:
As I’m sure you’ve all heard, it seems that there was a terrorist attack at Port Authority just a few hours ago. The details are still spotty but initial reports are pointing to a failed attack, in a location that so many of our friends and family members pass through every day on their way to work. We are praying for the injured, thankful to our remarkable law enforcement and first responded, and we must redouble our efforts to find, stop and kill any terrorists — lone wolf, homegrown, ISIS-inspired or otherwise — in their tracks.
It’s good to be here in Fair Lawn and thank you to Columbia Bank and Tom Kernly for hosting today’s event. Columbia is the largest independent bank based in New Jersey, and I’m grateful for your 85 years of work serving communities, businesses and families in my district.
I’d also like to thank the New Jersey Bankers’ Association leaders, and their President John McWeeney and Mike Affusso, for standing here with me today. Thank you for joining the New Jersey Chamber of Commerce, New Jersey Business & Industry Association, the New Jersey Realtors and the National Realtors, the Homebuilders, law enforcement, nearly every Democrat and Republican in our congressional delegation, and many more in Jersey standing in solidarity against this Tax Hike Bill and standing up for the state of New Jersey.
We’re here today to set the record straight about the Tax Hike legislation moving through Congress, with a conference committee meeting set for this Wednesday — and to discuss a fix that can make this an actual tax cut bill I’m hoping we can all support.
As for the current version, the Tax Hike Bill, I am working across the aisle — and the Capitol — to do everything in my power to stand up for New Jersey against it because it will jack up our tax rates, eliminate key state and local and home ownership deductions, ruin our property values, and likely send people, jobs and businesses fleeing from our state. This Tax Hike Bill is not pro-business, not pro-homeowner, and it’s certainly not pro-New Jersey. It’s anticompetitive, favoring one state over another. And I believe it could trigger another recession here in the northeast and, ultimately, across the United States.
There are certainly those who claim otherwise. Don’t be fooled. This bill is short-termism and shameless theft —politicians from one group of states, that I call Moocher States, because they take far more tax dollars than they put in, giving themselves handouts at the direct expense of other states that already pay too much. New Jersey families are at the top of the list of those being robbed. Mississippi already gets $4.38 for every dollar compared to our 38 cents – and now they want more.
It’s why the day of the vote last month, a southern congressman looked at me with a big grin and exclaimed, “Today is the day we get to stick it to the northeast!”
While taxpayers in New Jersey and three other states will pay $16.7 billion more under the bill, 46 states will receive a $101.5 billion tax cut. In other words, the bill hyped as a tax cut is clearly a tax hike on us.
Let me tell you what I’m for — I want actual tax cuts for New Jersey families, and businesses of all sizes. I’ve been working since I was elected, in a bipartisan way, to get there. As Co-Chair of the Problem Solvers Caucus, I have met with everyone from Speaker Paul Ryan to President Trump to make the case for tax cuts for families and businesses and simplification — done the right way. Not in a way that will punish certain states, crush the housing market, pile $1.5 trillion onto the national debt. I’ve introduced my own Tax Cut Plan with Republican Congressman Leonard Lance.
I support cutting corporate tax rates, as proposed, to keep us competitive globally, so companies don’t move their headquarters and their jobs to other countries. At 35 percent, right now, we have the highest corporate tax rate among all OECD countries, and the fourth highest tax rate in the world. The global average is 22.96. We’re simply not competitive.
The problem is the Moochers decided to pay for most of their plan, not by closing loopholes or shelters, but by sticking us with the bill —eliminating our ability to deduct our state and local taxes — and capping our property tax deduction.
This Tax Hike Bill is a direct hit on New Jersey’s Main Streets and communities and will hurt our business owners, prospective home owners, and workers—risking, not creating, jobs, inciting instability in our housing markets, and destroying overall wealth for our state.
If we go down this path, studies show that housing prices will plummet twenty percent or more and people’s disposable income will fall. It will increase default rates on home loans — and we already have the highest foreclosure rates in the country.
The House version of the Tax Hike Bill slashes homeowner’s ability to deduct their mortgage payments by fifty percent, capping the deduction at $500,000 and eliminates the ability to deduct a second mortgage or a home equity line of credit.
Powerful incentives to save for a home, maintain it and build home equity will be eliminated with the stroke of a pen. And, of course, home ownership drives 1/6th of our economy. These incentives also provide the economic force behind New Jersey businesses from realtors to renovators, from landscapers to lenders.
If you live in Oklahoma City, where the average home costs $142,000 and property tax bill is $1,420, the changes in incentives won’t matter as much. But, in Oradell, N.J., where the average home costs $578,900 and the property tax is $16,851, it will make a real difference.
We are already the highest tax state with too much red tape — and are ranked 49th or 50th in business friendliness.
This Tax Hike Bill will tell every N.J. company to move or grow elsewhere — it’s simply too costly for your employees. And, even with the best schools and safest and most beautiful communities around, how are we supposed to convince others to come here? And how do we persuade retirees and others not to move to the massively lower taxed Florida?
This Tax Hike Bill raises taxes, hurts small businesses and the economy, which in turn decimates lending and investment into New Jersey companies.
Pass-thru entities, which comprise 90% of small businesses, are left out. The House version only helps a few companies. The rest are taxed at the full individual rate which may be as high as 39.6%. The ability to deduct debt will be limited – but only for some businesses and not others. The ability to carry back operating losses is severely limited, which has historically been an important way to finance new investment.
What happens here in New Jersey to our larger companies like BD, Stryker, and other cutting-edge life sciences companies and their jobs? What happens to our small and medium sized businesses, most of whom won’t see any tax relief? And what happens to our financial services industry? It is the key to our entire region—from the direct jobs they create to the indirect jobs they spur through lending. From IRAs to small business loans, we need a strong financial sector. What happens to the countless mortgages that will be under water once property values plummet?
As the NJ Bankers aptly put it, the Tax Hike Bills are, “bad for our members because they’re bad for our customers and bad for New Jersey’s economy.”
We’ve already lost major other employers like Hertz and Mercedes, and others are teetering on the edge.
Young people are leaving our state just as their careers are beginning. We experience the worst outmigration and brain drain in the country – just two people come to our state for every three who leave.
That’s why the New Jersey Bankers Association’s statement says, “These bills will accelerate the outward migration of New Jersey citizens to other states and discourage borrowing and capital investment”
It’s why Larry Kudlow on CNBC said, “When you end the state and local deduction, because rates are still relatively high, you are going to hurt a lot of different people.”
We have sat with CPAs, with businesses, with tax policy experts, with seniors on a fixed income, with families trying to save for college — eliminating the state and local tax deduction and capping property tax deductions will kill them. If you are a widowed, retired senior in Allendale on a fixed income, your taxes are going up more than $1,000. If you’re a cop and a teacher living in Paramus and you own a home, your taxes are going up more than $5,000 — next year.
What does that mean? Simply put, it means that to find that $5,000, that family will likely cut back on other money they planned to spend to hire a builder to fix up their basement, or will forgo buying a new TV or Apple Watch. The senior from Allendale on a fixed income will have to dip even further into her savings, even as her house value plummets. Our towns will be forced to cut back on our school and police budgets. More people will be unemployed as jobs move to Pennsylvania or Florida. After all, Florida is already running new ads to lure people down.
You don’t need a PhD to know that these are the ingredients for a recession. And it may start here and in the other higher cost, SALT states, but these things are contagious. As we spend less and our housing market crashes, the Moocher states will start to suffer. They rely on our commerce, too. Not to mention, the top ten SALT states contribute forty percent of the annual revenues to the US Treasury. What happens when they retrench? The Moocher States will spiral downward, too. Add that to an increase on the deficit and debt of $1.5 trillion, massive uncertainty and volatility in the marketplace and among businesses – these are all factors that have recessionary effects on the economy.
So, how do we get to yes and actually fix this Tax Hike Bill so that it actually cuts taxes and helps every state?
My grandpa always told me, “don’t just complain, offer a solution.” Here is solution that likely get me to yes on this bill because it would actually cut taxes for New Jersey. Rep. Leonard Lance and I drafted a feasible, realistic, bipartisan tax cut plan that preserves SALT and saves the Mortgage Interest Deduction. The plan would retain the same basic rate structure as the Senate bill, including doubling the standard deduction, lowering rates for individuals and reducing the top tax bracket. It would keep our housing market on the road to recovery and preserve the ability for banks–like this fine one here today–to invest and spend on our people and our communities.
It cuts the Corporate Tax Rate to 20% and creates a 23% deduction for small businesses and pass-through businesses, including professional services such as doctors, lawyers and accountants, consistent with the Senate Bill, and with these changes encourages investment and will energizes the New Jersey economy. In short, our tax cut plan benefits every single American, regardless of their geographic location or income level. It preserves the medical deduction, student loan interest deductions, and those for private activity bonds, which are so important to hospitals in our region and to building bridges. It is a win, win, win and it actually looks out for New Jersey and the Northeast, instead of leaving us out of the process entirely.
Our bipartisan plan to lower taxes in New Jersey is not smoke and mirrors – the math and the specifics are posted on my website.
My colleagues are joining in pressing the conference committee working on the tax bill, this week. It’s been reviewed by the experts, and it has been endorsed by the New Jersey Chamber, the National League of Cities, the National Association of Counties, the US Conference of Mayors, and the International City/County Management Association. Even Larry Kudlow added his “kudos” to our tax proposal which he called “pro-growth.”
If you would like to see a copy we have some here and it is available on my website at Gottheimer.House.gov.
In closing, I’m going to read you an actual letter I received earlier this month: “I have been a lifelong supporter of the Republican Party. However, I have been doing research on tax reform and wanted you to know if passed the SALT passing already in the House … it would force me to consider moving out of the state and sell my home which my family loves.” And it hasn’t been just one letter – our Tax Hotline has been ringing off the hook, our mailbox and email has been filled with a huge number of similar complaints.
This isn’t a Democrat or Republican issue. We need to fight for New Jersey and our families need a tax cut, but what we’ve seen so far in Congress is a Tax Hike Bill paid for on our backs in the Garden State. I will continue to fight to deliver tax cuts and stop Moocher States from gutting New Jersey’s economy. I hope you will too.
Thank you and God bless you.