Flashpoint CD11 and the Federal Fight over Taxes

Taxes are important.

And no tax issue is as contentious as the recently-enacted federal tax cuts.

Just take a look at congressional District 11.

Republican candidate Jay Webber says the tax cuts will provide an average family of four in the district with $6,040.

That’s a nice chunk of money.

But wait a minute.

Democrat Mikie Sherrill contends residents actually will lose money because the tax package capped the deduction for state and local taxes, or SALT, at $10,000. And her campaign says the average SALT deduction for district residents is $20,124.

So, we have a $26,000 swing. What gives?

Numbers can be interpreted in many ways, but the numbers themselves do not lie. And here is what each campaign is claiming.

The Webber campaign relies on a chart released last December by the Republican-controlled House Ways and Means Committee, which  breaks down how much federal tax reform will benefit each congressional district. As one of the most affluent regions in the nation, it’s no surprise that the stated benefit for the 11th District is one of the highest in the nation. The committee’s chart uses median income figures to conclude that the average family of four would receive $6,040 in benefits; the average benefit for all district households would be $2,782.

The federal tax reform package included lower rates, a higher standard deduction and a more generous child tax credit.

Sherrill has said she opposes the tax package, prompting the Webber campaign to suggest she supports increasing taxes by $6,040 on the average family of four in the district.

But are things really that simple?

Not really.

The Sherrill campaign points to a study prepared by the Government Finance Officers Association. The headline is, “The Impact of Eliminating the State and Local Tax Deduction.”

The report’s conclusion begins with this line, “The elimination of the SALT deduction would have ramifications for taxpayers and state and local governments alike.”

And for New Jersey’s 11th District, that impact amounts to $20,124. That, the report says, is what the average family in the district has been able to deduct in state and local taxes when paying their federal tax bill.

That deduction has not been eliminated, but it’s been capped at $10,000. So, under this analysis, the average family loses a $10,124 deduction on their federal taxes.

It’s no surprise both campaigns are far apart here.

The only New Jersey member on the Ways and Means Committee is Democrat Bill Pascrell of Paterson, who has been outspoken in condemning federal tax reform as unfair to most New Jersey residents. Democrats discount the GOP’s analysis, noting they are not privy to the  methodology that was used. And they question whether the estimated $6,000  benefit takes capping the SALT deduction under consideration.

A spokesperson for the House Ways and Means Committee has not responded to emails about the chart.

What gives the Democrats’ position some credence here is that all Republican House members from New Jersey except one voted against the federal tax reform bill in question.

Candidly, it’s hard to see Rodney P. Frelinghuysen voting “no” if the tax bill really was going to bring about $6,000 in benefits to the average family of four in the district.

But don’t expect the Webber campaign to shy away from this issue.

Campaign Manager Phil Valenziano said in an email that federal tax reform is not only about the SALT deduction. He said tax reform has produced a booming economy, declining unemployment and rising consumer confidence..

“Sherrill’s fixation on the cap is like winning the World Series 4-1 and focusing only on the one game you dropped,” he said.

Baseball analogies are often fun and this one is no exception.

But this contest is winner take all, not four out of seven.

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