U.S. Commerce Secretary Wilbur Ross, one of the architects of the controversial Tax Cuts and Jobs Act passed at the end of last year, told a group of state bankers that the new tax law “probably doesn't affect very many people in New Jersey very adversely.”
Ross’ comments came as somewhat of a shock to the 600 local bankers and professionals at the New Jersey Bankers Association’s Economic Leadership Forum on Friday in Somerset. Passed by President Donald Trump in December, the law was voted against by every New Jersey representative except for one, Tom MacArthur, R-3rd District.
Groups such as the New Jersey Chamber of Commerce and the New Jersey Business & Industry Association lamented the fact it caps the deduction for property taxes at $10,000 and preserves the mortgage interest deduction only for existing mortgages and new purchases with mortgages of $500,000 or less.
Capping property tax deductions could further drive residents out of the state, given that New Jersey has one of the highest property tax rates in the country.
According to Ross, however, the new tax law “probably doesn’t affect very many people very adversely in New Jersey.” And for those who may have concerns about the effects of the legislation, Ross simply said “it’s now the law of the land, so we’re all going to have to figure out how to live with it.”
He went on to laud the law, telling the crowd that the roughly three-quarters of the population in the U.S. will be getting a tax break.
“It’s very hard to misrepresent things to somebody who’s getting more cash in his pocket,” he said.
Ross blamed the media for putting a negative spin on the law, and said the effects of a property tax deduction cap will be minimal and offset by the fact that it does away with the alternative minimum tax bracket.
He also pointed out that just 40 percent of the people in the state will be “adversely affected” by the new tax law because that is the percentage of people in the state who earn $200,000 or more. He acknowledged “that’s an unfortunate consequence” of the new law.
“I realize the reason that you all worry about it, particularly in that New Jersey has had a problem with outward-bound migration to other areas,” Ross said. “There may well be a hopefully modest increase of outward migration at the high income brackets because of that new tax law.”