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- Rep. Tom MacArthur of New Jersey on Monday said he would support the Tax Cuts and Jobs Act. MacArthur had expressed concerns about the elimination of much of the state and local tax deduction, which benefits many in high-tax states like New Jersey. Winning over MacArthur is a big victory for House GOP leaders trying to bring on lawmakers from those states.
Rep. Tom MacArthur of New Jersey on Monday said he planned to support the tax bill rolled out by House GOP leaders last week, despite changes to a key deduction for his state.
MacArthur was initially skeptical of the bill because of its proposed repeal of most of the state and local tax deduction, which allows people to subtract what they pay in state and local taxes from their federal tax bill. The deduction is particularly meaningful in high-tax states like New Jersey, New York, and California as well as in municipalities with high local taxes.
Repealing the SALT deduction provisions, a move that would generate an estimated $1.5 trillion in new revenue over 10 years, drew criticism from Republicans in places that benefit from the deduction.
Many lawmakers from those states voted against the recently passed budget resolution that paved the way for the tax legislation, signaling possible trouble for the bill – there are enough GOP members from those states to block the Tax Cuts and Jobs Act.
That forced Rep. Kevin Brady, the chair of the House Ways and Means Committee and the author of the bill, to come up with a compromise on the SALT deduction that would allow people to deduct up to $10,000 in property taxes but not sales and income taxes.
A representative for MacArthur confirmed to Business Insider that the lawmaker supported the plan.
The compromise, MacArthur told Fox Business, was enough to win him over.
“Ten-thousand dollars is enough for the vast majority in my district and New Jersey,” MacArthur told Fox Business’ Brian Schwartz. “When I get most of what I asked for, it’s time to accept it.”
MacArthur also seemed open to the compromise during an appearance with Fox Business’ Maria Bartiromo on Sunday, saying most constituents in his district took a SALT property-tax deduction smaller than the $10,000 cap.
“I spent the last three days actually looking at this $10,000 cap on property taxes, and I came to the only conclusion I think anyone who really looks at it can come to, and that is: We just got a huge win for middle-class taxpayers even in high-tax states like mine,” MacArthur said. “A $10,000 property-tax limit still covers a vast majority of people in my state and in my congressional district.”
While there remain a slew of members – particularly from New York and New Jersey – who have expressed displeasure about the deal, getting MacArthur on board is a key win for the House GOP leaders, especially if they want to meet their deadline of getting the bill passed by Thanksgiving.
The next step for the Tax Cuts and Jobs Act is a markup in the Ways and Means Committee, which will begin Monday.