By Josh Gottheimer

There is no shortage of reasons why the Tax Hike Bill passed in the House this month would be catastrophic for New Jersey.

It's why everyone from the New Jersey Chamber of Commerce to law enforcement to nearly our entire congressional delegation -- Republicans and Democrats - came out against it.

It's why my office has been deluged by constituents, including Deborah from Glen Rock, who is panicked that she "will have to put her home up for sale," noting that the legislation is a broken promise on the cost assumptions she and her husband made when they bought their home. That promise was based on the simple fact that you could deduct your state and local taxes (SALT), including property taxes, and the interest on your mortgage.

I've been sounding the alarm for weeks now: The Tax Hike Bill, now before the Senate and backed by President Trump, will raise taxes on a super majority of people in our state, eliminating key cost-saving deductions, including SALT, the property tax deduction, and the mortgage interest deduction.

As a result, for those of us in northern New Jersey, federal and property taxes will go up, jobs and business will flee, and it's going to be harder to sell your home for what it should be worth.

Now, I'm eager to find bipartisan legislation that actually cuts taxes for New Jersey, so we can keep and attract businesses and talent.

Unfortunately, the Tax Hike Bill, as it stands, is nearly all paid for at our expense. So, it's punitive if you live here -- but it's great if you're in Alabama and Mississippi. They're already mooching off of our taxpayer dollars. This elevates their mooching to outright theft.

What hasn't been written about enough is how this Tax Hike Bill will likely spark a massive housing crisis in our state, at a time when we are just beginning to recover from the last recession. Our homes are still down 12 percent of their value before the recession began in 2007; the rest of the country's homes are up 12 percent since then. Logic dictates that with this bill, it will only get worse.

You don't need a Ph.D. in economics to see where this is all going. This Tax Hike Bill is a one-two knockout blow for our housing market and economy.

First, the obvious: losing your ability to deduct your mortgage interest and property taxes will mean that owning a home in New Jersey will be far more expensive. If you live in Oklahoma City, where the average home costs $142,000 and property tax bill is $1,420, you won't feel these changes. But, in Oradell, N.J., where the average home costs $578,900 and the property tax is $16,851, it will make a real difference.

With these dramatic changes, fewer people will be able to afford New Jersey; businesses and people will go elsewhere. Housing prices will free fall. One large study put the drop of home prices at more than ten percent nationwide - it will be far greater for states like ours.

For many homeowners, that sort of a price drop will wipe out most or all of their original investment and retirement nest eggs. Our towns, in turn, will lose revenue, affecting our schools, police and other services. The S&P global ratings agency announced last week, "There could be a credit impact from both the tax base reduction and resulting lower tax revenues for local governments dependent on property taxes."

Second, the Tax Hike Bill will cut the maximum mortgage deduction in half, to $500,000, and immediately eliminates deductions completely for second homes and home equity loans. This will cut property values and affordability sharply, increase foreclosures, and slow down home construction and renovation (one-sixth of our economy). We already had the highest foreclosure rates in the country last year.

A downturn not only hurts homeowners, it kills jobs from Wall Street to Main Street.

It's easy to understand why the New Jersey Realtors and the New Jersey Builders Association came out against this Tax Hike Bill, "Eliminating, nullifying, or capping tax incentives for homeownership puts home values and middle-class owners at risk and further stigmatizes New Jersey as an unaffordable place to live." I agree completely.

Josh Gottheimer, D-5th Dist., is a New Jersey member in the U.S. House of Representatives. He serves on the House Financial Service Committee, and is co-chair of the bipartisan Problem Solvers Caucus.

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