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 2017 10 04 Tom Bracken L
Tom Bracken of the New Jersey Chamber of Commerce (New Jersey Chamber of Commerce)

The head of the New Jersey Chamber of Commerce called a tax bill moving through Congress "very dangerous" for the state on Tuesday, the same day the national chamber urged senators to support it and said those who don't would get negative marks on the group's congressional scorecard.

The split between the national and state branches of the pro-business lobby highlights how a tax plan President Donald Trump routinely praises as a massive tax cut for the middle class would not affect everyone the same.

A bill that passed the House last Thursday would restrict the deduction for local property taxes and eliminate it for state income taxes. A different plan pending in the Senate would repeal both deductions entirely, starting Jan. 1.  

With a steep graduated income tax and property taxes that are among the highest in the country, New Jersey relies more heavily than most other states on both deductions to counteract the high cost of living in the state.

"The thing we cannot afford right now is to become less affordable, to become less competitive," Thomas Bracken, president of the state chamber, said Tuesday at an appearance in Paramus with Rep. Josh Gottheimer.

While businesses would still be able to deduct their state and local taxes under the House or Senate bills, residents would not, and Bracken said that would drive down property values, which could result in property tax rates going up. It also could make it harder for companies to attract the best workers.

"Tax reform should be something that every state benefits from. We do not," Bracken said. "Being against the tax reform act, that's about as pro-New Jersey as you're going to get right now. So all I can say is that we have a very dangerous situation we have to avoid."

Gottheimer, D-Wyckoff, voted against the tax bill last week after being part of a bipartisan group of House members who met with President Trump to discuss that issue and others in September.

"I want to get to yes, and I'll continue working with both parties," Gottheimer said. "The legislation approved by the House and racing through the Senate sticks it to New Jersey and will make us less competitive. It's a boon to other states that already suck up our tax dollars."

The U.S. Chamber of Commerce paints a different picture, saying in a letter to senators on Tuesday the bill would would "unleash resources for businesses large and small to hire new workers, expand facilities, and purchase new equipment." The chamber said the vote would be tracked on its congressional scorecard, which is used at election time to rate how business friendly members of Congress are.

Asked about the conflict with the state chapter, a chamber spokeswoman pointed to a fact sheet on its website that used averages and studies by think tanks to estimate New Jersey would add 26,072 jobs if the bill became law and the after tax income for middle class families would increase by $3,013. 

Bracken challenged the figures, saying the studies did not look at how much state residents rely on deductions being lost, and did not measure the impact of a decline in housing values.

He noted, for example, that people with home equity loans not only would lose the ability to deduct that interest, they might find themselves in default if banks say their homes are not worth as much, and therefore the owner has less equity against which to borrow.