Democrats in New Jersey are hoping that President TrumpDonald TrumpGraham says he hopes that Trump runs again Trump says Stacey Abrams 'might be better than existing governor' Kemp Executive privilege fight poses hurdles for Trump MORE's tax-cut law provides them with a boost in the midterm elections.
The law caps the state and local tax (SALT) deduction at $10,000, a change that hurts people in high-tax states such as New Jersey, which has the highest property taxes of any state.
All but one New Jersey Republican voted against the tax law, in large part because of the limit on state and local tax deductions. Democrats on the campaign trail say restoring the full deduction means putting their party back in charge of the House.
“The capping of the state and local tax deduction is devastating for New Jersey families, and will be a major campaign issue this fall,” said Democratic Congressional Campaign Committee spokesman Evan Lukaske. “Make no mistake: regardless of their votes or rhetoric, every Republican on the ballot owns every dollar of these tax hikes.”
Republicans highlight that most New Jersey taxpayers are expected to see a tax cut as a result of the new law.
The Urban-Brookings Tax Policy Center (TPC) estimated that 61.5 percent of households in the state will see a tax cut in 2018 due to the major individual income tax provisions in the law.
“With a roaring economy and consumer confidence near an all-time high, Republicans stand to benefit greatly at the ballot box this fall,” said National Republican Congressional Committee spokesman Jesse Hunt.
However, TPC estimated that 10.2 percent of New Jersey households will see a tax increase — the greatest percentage of any state. And a big reason is a change in the state and local tax deduction.
It could be critical in the race for the House majority itself.
Democrats need a net gain of 23 seats to take back control of the House.
They have a chance to gain as many as four seats in New Jersey.
According to the Cook Political Report, New Jersey’s 2nd Congressional District, where GOP Rep. Frank LoBiondoFrank Alo LoBiondoVan Drew-Kennedy race in NJ goes down to the wire Van Drew wins GOP primary in New Jersey Amy Kennedy wins NJ primary to face GOP's Van Drew MORE is retiring, is likely to fall to Democrats.
The 11th District, where GOP Rep. Rodney FrelinghuysenRodney Procter FrelinghuysenBottom line Republican lobbying firms riding high despite uncertainty of 2020 race Ex-Rep. Frelinghuysen joins law and lobby firm MORE is retiring, is leaning Democratic, according to Cook.
Frelinghuysen’s seat is one of the two districts in the state most impacted by the deduction change. The second is the 7th District, held by Rep. Leonard LanceLeonard LanceKean Jr. to run against Malinowski: report Thomas Kean wins GOP primary to take on Rep. Tom Malinowski Gun debate to shape 2020 races MORE (R), who is running for reelection in a race rated as a toss-up by Cook.
Both Frelinghuysen and Lance voted against the tax bill, but it remains an issue Democrats are seeking to use in their favor.
“That’s probably one of the crucial issues in this campaign,” said Mikie Sherrill, the Democratic nominee in the 11th District seeking to succeed the retiring Frelinghuysen.
The Republican nominee in the district, Jay Webber, said he would have advocated to keep the full state and local deduction, but that he would have supported the final measure. He cited data from House Ways and Means Committee Republicans that the median family of four in the district will get a tax cut of more than $6,000 under the law.
“It’s a win for New Jersey’s 11th and the nation overall,” he said, adding that Democrats are focused on a “blemish” in an otherwise great bill.
Tom Malinowski, the Democratic nominee running against Lance, said that, if elected, he would only vote for a House Speaker candidate who promises to promptly put a bill on the floor that would restore the full SALT deduction.
“If you want those deductions back, you’re not going to get that by voting [for] congressman Lance and empowering the House GOP leadership,” he said.
But Lance was positive about his chances for reelection, noting that he carried the district in 2016 by many more votes than Democratic presidential nominee Hillary ClintonHillary Diane Rodham ClintonDemocrats worry negative images are defining White House Heller won't say if Biden won election Whitmer trailing GOP challenger by 6 points in Michigan governor race: poll MORE did. And he said that his constituents are aware that he voted against the tax bill because of concerns over the deduction cap.
“This is a highly educated district,” Lance said.
Patrick Murray, director of the Monmouth University Polling Institute in New Jersey, said he thinks that the issue could influence the outcome of the two races, given that New Jersey has high taxes and the districts are wealthy. He said it could give moderates a reason to vote for Democrats.
“The tax bill is what you use to appeal to moderates who look at their own pocketbooks,” he said.
A Monmouth poll conducted late last month found the race in the 11th District to be within the margin of error, and that voters in the district were split on their opinions of the tax law. Thirty-eight percent said they expected their taxes to go up because of the new law, compared to only 19 percent of voters who said they expected their taxes to go down. About one-third of voters in the district said the tax law will have a major impact on their vote, and more people in that group said they planned to vote for Sherrill than Webber.
But other political experts in New Jersey said they thought that the tax issue may be overshadowed by other issues.
“It hasn’t been a significant factor thus far,” said New Jersey GOP strategist Carl Golden.
The SALT deduction cap has also been an issue in the race for New Jersey’s 3rd Congressional District, where Rep. Tom MacArthurThomas (Tom) Charles MacArthurChamber-backed Democrats embrace endorsements in final stretch Republican David Richter wins NJ primary in race to challenge Rep. Andy Kim What to watch in New Jersey's primaries on Tuesday MORE (R), the only House member in the state to vote for the tax law, is seeking reelection.
The district is more conservative than the 7th and 11th, and Cook rates it as competitive but leaning Republican.
MacArthur has been aggressive in defending his vote and making the case to voters that the tax law will benefit them. His campaign website notes that he helped to secure a $10,000 SALT deduction when top GOP policymakers initially wanted to scrap the deduction altogether.
Chris Russell, a strategist for MacArthur’s campaign, said that voters “feel comfortable that Tom MacArthur went out and fought for them.”
But MacArthur’s Democratic challenger, Andy Kim, has been criticizing the incumbent for his vote.
“Tom MacArthur broke with every other lawmaker from New Jersey and voted to hike taxes on New Jersey middle-class families,” Kim said.
In addition to the tax law coming up in New Jersey House races where Democrats are hoping to flip seats, Sen. Bob MenendezRobert (Bob) MenendezBiden, don't punish India Democrats reject hardball tactics against Senate parliamentarian Biden threatens more sanctions on Ethiopia, Eritrea over Tigray conflict MORE (D-N.J.) has been making the issue a priority as he seeks to win reelection.
Menendez is likely to win reelection but faces some obstacles. The Senate Ethics Committee admonished him in April, finding that he accepted gifts without approval and without disclosing all of them. Menendez was on trial last fall but the jury deadlocked and the Justice Department subsequently dropped the charges.
Menendez offered an amendment to the tax law to preserve the full SALT deduction, but it was rejected. Since the tax law was enacted, he has frequently brought up the SALT deduction in hearings.
“The answer is we need more Democrats — not Republicans — in Congress to fight the Trump agenda and restore the SALT deduction,” said Menendez campaign chairman Michael Soliman.
But his GOP opponent, Bob Hugin, argues that he’s in a better position than Menendez to fight to eliminate the SALT deduction cap.
“[Menendez has] been an absentee senator and now we’re paying the price. If elected, I will work with both sides of the aisle to lower taxes and make New Jersey more affordable,” Hugin said.