Trump Budget & Tax Plan Would Hit New Jersey Hard

The proposal is rooted in magical thinking. But it’s worse than a fairytale.

Published on Nov 1, 2017 in Tax and Budget

This op-ed appeared in the Sunday, October 29 edition of the Asbury Park Press.

This week the U.S. House of Representatives passed a budget resolution that brings Congress one step closer to enacting $1.5 trillion in unpaid-for tax cuts largely for the wealthy and profitable corporations while making low- and middle-income New Jerseyans foot the bill. The budget sets up a fast-track, partisan process for passing the Republican tax plan with just 51 votes, the same process they used to try to force through the repeal of the Affordable Care Act.

The bright side is that 11 of New Jersey’s 12 House members voted against this dangerous budget plan. Those leaders in D.C. – particularly GOP Reps. Leonard Lance, Frank LoBiondo and Chris Smith – should be applauded for putting the people of New Jersey first with their “no” votes, and should be urged to remain steadfastly opposed to a budget and tax plan that is skewed to the very wealthy, raises taxes on many New Jerseyans and sets up deep and damaging cuts to critical public services and investments on which all of us rely. (While Rep. Tom MacArthur voted “no” this week, he did help set the process in motion with a “yes” vote on the budget resolution earlier this month.)

Rep. Rodney Frelinghuysen, on the other hand, was the lone “yes” vote from New Jersey, thinking perhaps that the “tax reform” plan pitched by President Trump and his allies in Congress will help working families across the country. But New Jersey families have a right to ask him: Really? How so?

The plan is clearly skewed to benefit a small group of wealthy taxpayers, shareholders and profitable corporations, with very little left to benefit the middle class and everyone else. And the massive loss in revenue caused by these tax cuts would blow a hole in the nation’s finances to the tune of $234 billion as soon as next year, according to the Tax Policy Institute.

Anti-tax activists claim these huge cuts for the top will unleash a torrent of economic growth, thereby ensuring no real “cost” from the tax breaks – and no real pain for the American people. But history clearly tells another story.

Trickle-down economics has been disproven and debunked again and again – mostly recently in Kansas, which retreated in defeat after generous tax cuts tilted to businesses and the wealthy failed to deliver promised widespread prosperity to the Sunflower State. As the Kansas experiment vividly shows, tax cuts like these don’t lead to growth – they only lead to dried up budgets and cuts to education, health care and other vital programs that help working families.

The Trump-GOP plan, in short, is rooted in magical thinking. But it’s worse than a fairytale: for many New Jerseyans, it’d be more like a nightmare.

New Jersey’s wealthiest families would be the only real winners under this plan. A whopping 82 percent of the plan’s tax cuts would got to New Jersey’s richest 1 percent, with an average tax cut of approximately $74,000, according to the Institute on Taxation and Economic Policy. Meanwhile, about one in four New Jerseyans would face a tax hike, paying an average $2,400 more each year.

Whatever meager tax break is given to low-income and middle-income New Jerseyans would inevitably be wiped out by cuts to public services and programs that those families rely on like health care, education, food assistance and much more. To be clear, the very programs that help everyday New Jerseyans make ends meet and move up the ladder of opportunity are the currency with which the Trump administration and Congressional leaders hope to pay for huge tax cuts for those who are already doing quite well.

New Jersey taxpayers across the state would be hit especially hard if the widely used deduction for state and local taxes is eliminated. It would especially blow a massive hole in the wallets of New Jersey middle-class taxpayers.This proposal is not tax “reform.” It’s a giveaway to those who already benefit the most in this rigged economy: the very wealthy and large, profitable corporations. And pairing these tax breaks with deep cuts to economic security programs would only make today’s runaway inequality worse.

Real tax reform would help New Jersey’s low- and middle-income families that have been hit hard by the state’s sluggish economic recovery. Real tax reform would ensure that we have the resources to invest in the things that are proven drivers of a strong economy like education, health care and infrastructure. Real tax reform would stop providing special treatment for the wealthy and start investing in the assets that only the government can make in the coming decades to meet the public’s needs.

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