Garrett Against Tax Breaks

Representative Scott Garrett joined all but two Republicans in voting against extending $31 billion in tax breaks. Here's how the AP describes it:

The tax breaks include a sales tax deduction that mainly helps people in the nine states without local income taxes, a property tax deduction for people who don't itemize and lucrative credits that help businesses finance research and development.

[snip]

The tax breaks are supported by Democrats and Republicans alike and are routinely extended each year, but there are big disagreements over the tax increases that would pay for them. The dispute, combined with the Senate's prolonged debate on health care, makes it unclear whether the tax package will be enacted this year.

[snip]

Most Republicans argued that the tax increase would reach far beyond Wall Street, hitting real estate investment funds across the country. Instead, Republicans said, the tax breaks should be financed by federal borrowing, increasing the budget deficit.

The party that had one time introduced PAYGO has completely flipped to being the party of tax cut and borrow. They talk all the time about unfunded mandates, a favorite phrase of Garrett's is kicking the can down the road, but the fact is that when it comes to anything involving balancing the budget they wholeheartedly oppose the action.

It seems there are now a whopping two Republicans in the House who can claim to be fiscally conservative. This is an improvement, but the party has a long way to go to ever earn the right to recapture the purse strings of our nation's future.

If Garrett said anything during the debate or releases a statement I'll post it.

Garrett vs. 1.4 million Home Buyers

Representative Scott Garrett finally explained why he voted against extending unemployment benefits and the first time home buyer tax credit:

So, in sum, we have a program rampant with fraud, which gives taxpayer dollars to people who don’t legitimately qualify, and fails to appropriately credit the individuals that do qualify. It’s clear that employees of the IRS were aware of the problems with claims process for this program, as the inspector general found 53 cases of IRS employees filing "illegal or inappropriate" claims for the credit. In its current form, this program costs taxpayer about $1 billion a month and is expected to cost $15 billion for the year. Rather than terminate this program, Congress voted on November 5 to expand the program to homeowners looking to buy a replacement principle residence. How many more four-year olds will fraudulently receive taxpayer money under this program before Congress realizes this is a terrible idea?

Voting to expand this program would have been irresponsible of me, and an abdication of my responsibility as a guardian of taxpayer dollars. The Homebuyer Tax Credit Program was a poison pill to otherwise well-intended legislation.

It bears repeating that Garrett was one of 2.7% of the House to vote no on this bill, so it hardly was a poison pill.

It also bears repeating that Garrett has never stood up with the same conviction regarding funds going to fraud in Iraq, which has funded those who kill our troops.

Garrett gave a number of stats that, while far from ideal, pale in comparison to the good the program has done. From the Gazette, here are the numbers that were largely reported (bolding Garrett):

• 19,300 electronically filed 2008 tax returns where people claimed the First-Time Homebuyer Credit, yet had not purchased a house, claiming that they intended to do so in the future. Cost to the taxpayer: $139 million.

• 74,000 credit claims by filers who it was later determined weren’t first-time homebuyers. Cost to the taxpayer: $500 million.

• 580 taxpayers younger than 18 years of age who claimed First-Time Homebuyer Credits; the youngest of whom was a four-year old. Cost to the taxpayer: $4 million.

• 3,200 individuals claiming credits thought to be alien residents, which are prohibited from receiving most Federal public benefits. Cost to the taxpayer: $20.8 million.

It's unfortunate to see that if you add all the numbers together that roughly 6.5% of claims were fraudulent. However, the IRS is pursuing criminal investigations and suspending rebates, so those folks will be dealt with in time.

In the meantime, it also means that 93.5% of the submissions appear to be valid, which means roughly 1.4 million new homeowners have been helped by the program.

Garrett's statement explaining his vote against the bill is nothing more than a spotty claim to righteousness that makes the perfect the enemy of the good. Garrett seems to want to poison the discussion by ignoring the good the program has done, as well as the measures being taken to correct the program. That's a disservice to constituents and all of the home buyers and sellers within the district who benefit from the program.

Garrett Lectures EU on Hedge Funds

A hallmark of conservative principles used to be that we don't interfere with other nations, because we don't want them interfering with us. However, in this new world, our Representative Scott Garrett decided he should join in defense of hedge funds with Representative Paul Kanjorski in criticizing what is essentially a European Union decision. From Bloomberg:

Paul Kanjorski, a Pennsylvania Democrat, told EU lawmakers today that proposed EU rules “scared the living bejesus” out of the industry. (London Mayor) Johnson said that the proposals threaten London’s role as a leading financial center.

The rules under consideration would limit the amount of borrowing hedge funds can use and require the use of European- domiciled banks. The initiative was designed amid the fallout from the financial crisis, in which the decline of the U.S. housing market triggered bank losses and triggered the first worldwide recession since World War II.

“Your focus should be elsewhere,” Congressman Scott Garrett, a Republican from New Jersey, told members of the European Parliament’s economic and monetary affairs committee. He said hedge funds weren’t the cause of the global financial crisis.

While Garrett has a history of defending hedge funds, one has to hope the characterization of Garrett's comments weren't actually Garrett saying they played no part in the problem. It would be the height if irresponsibility for him to suggest hedge funds played no part in artificially inflating the bubble.

However, Garrett's "focus elsewhere" comment is very much in line with his thinking. Readers have to remember, he voted against having hedge fund managers taxed like normal people, which would lay the groundwork for a permanent AMT fix for the 20% of our District who have to pay it.

Yes, apparently the opposition to the proposals are bi-partisan, but why are our Congressmen over in Europe telling them how to run their markets? What jobs are they costing our financial sector, if in fact hedge funds would move, should the regulations go into place?

The Tea Parties

Yesterday, in addition to being tax filing day, also became national "teabagging" day as thousands took to the streets to protest having to pay taxes. It's interesting that those leading the charge are many of the same people that looked the other way while the Bush Administration and his Republican Congress were saying deficits don't matter.

Our own Representative Scott Garrett got in on the action, mentioning the tea parties in an Op-Ed he got published in the Herald News.

Americans recognize that the government needs their tax dollars to function and provide essential programs for our country, and Americans have always been willing to pay their fair share.

As nice a statement as it is, the "fair share" thing depends who you're talking to.

The reason our District gets crushed by the AMT is because getting rid of it would force taxes and/or borrowing up for the rest of the nation. There was the thought of taxing 5,000 or so hedge fund managers like normal people, which actually would have been a huge step toward repealing the AMT, but Garrett and others rejected the approach. Is that fair?

And what's essential?

You're reading this, so you're benefiting from the investment of taxpayers in the 60's, 70's and 80's to build the technology and backbone of the Internet.

On top of that, chances are, you honed your reading skills thanks to the investment of those taxpayers working when you were a kid. And there's no doubt many of us survived childhood due to vaccines that were funded by taxpayers from the 1920s to present day.

If you're at your job, it's roads and transit that others paid for to get you there. Ever pay to pave your driveway? Imagine having to pave your own road to work.

And we all cheered when Captain Richard Phillips was rescued, but we can't forget that taxpayers footed a lot of bills to get the SEALS to where they needed to be to take those shots, starting in kindergarten.

Now, there's no doubt the government spends a lot of money it doesn't need to. Programs like Medicare Advantage, where taxpayers are paying more for services than they should be, are ripe throughout government. Any meaningful change in tax and spending policy has to start by sifting things like that out. However, we're coming out of eight years of tax cut and spend, which eliminated not only deficit hawks but true fiscal conservatives in government.

In addition to no-bid contracts, earmarks tend to be a top waste of money, or at the very least one of the biggest ways of preventing us from making sure we're getting the best bang for our buck. Unfortunately, there are only 35 Representatives who don't request earmarks.

If you're one of the teabaggers reading this, then hold your own Representative accountable. If they're earmarking, they're not helping reduce government spending. If they're talking about eliminating national programs, they're talking about raising your local taxes. If they're talking about giving you tax cuts, but won't cut programs we don't need like the F-22, they're talking about taxing your grandchildren.

Protests like yesterday don't mean anything when people re-elect their own elected officials 90% of the time. The whole mess is our own fault, and it hardly started with Obama. Sure, Republicans seized and nourished the rage, but that's the greatest con-job of all since they were the ones handing out no-bid contracts in Iraq and were in control of Congress and regulation agencies when things started falling apart in the financial sector.

The partisanship, the name calling, all of it needs to stop. We're in a hole we allowed ourselves to be put in, and now we're going to have to dig ourselves out. It is possible we will, but the anger expressed yesterday needs to be transformed from name calling into concrete ideas. And voters need to wake up and realize where we're at has been decades in the making, and it's likely going to take a decade to fix.

Garrett Hearts Beer Brewers and Drinkers

Here's a measure I hope Representative Scott Garrett can help get passed, and a tax break I think most of us can get behind. The day before Valentine's day, Garrett joined a number of Representatives in co-sponsoring a bill calling for the Federal Excise tax on beer to be slashed in half (Rep. Bill Pascrell was an original co-sponsor).

This is much more about jobs and fairness than the penny or two per bottle the tax costs us as consumers. Using the most recent numbers I could find, as it stands now, the average micro-brewery in the US is paying an average of about $16,584 in federal excise taxes on their product, in addition to their income taxes and myriad of state, county and local taxes.

Beer is easily one of the most overtaxed consumer products in America.

Having known more than a few people that have worked at breweries, especially the micro variety, they are often times staffed by part-timers passionate about the craft and the product they produce. Kids working their way through college. Parents making a little income on the weekend. This kind of targeted tax break could be a huge boost to these small, passionate, job producing businesses.

Garrett and Pascrell taking up this cause now comes at important time for all of us who like well crafted beer. In a time of economic downturn and increased raw material costs, states like Oregon have gone off the deep end by considering increasing their excise tax 1,900% ($49.61 per barrel from $2.61). Other states like Idaho, Kentucky and New York either have or are thinking about increasing excise taxes even further.

With breweries as close as New York threatening to close due to their state's actions, New Jersey's relatively low excise tax could attract new business. If breweries really do close their doors, it's not hard to imagine their equipment finding it's way to New Jersey. Every time I see an abandoned factory here, I think about a brewery I used to frequent in Michigan that was able to turn an eyesore into a community gathering place.

Granted, we'd have to deal with our regulatory mess that somehow has only fostered 14 breweries in a state with almost 9 million people, but that's another post for another day.

In the meantime, cheers to Garrett for joining Pascrell in this effort.

Garrett Authors Alternative Stimulus

Representative Scott Garrett has answered the call of Representative Eric Cantor to introduce alternative economic stimulus packages. As with Garrett's previous piece, there is a 10% tax cut for corporations. However, this piece seems to be a vast improvement over his last set of proposals, including more tax cuts for families and individuals.

There's been a ton of press already, but The National Review lists off some of the things most people would agree are a good idea:

— An increase in the child tax credit from $1,000 to $5,000.
— An increase in the deduction for college expenses from $4,000 to $6,000,
and in the income threshold at which the deduction can be taken.
— An end to mandatory IRA withdrawals at age 70 1/2.
— The plan would also let people of any age draw down their IRA money
without taxes or penalties in calendar 2009.

The only big issue with this is what it does to the deficit. Garrett "pays" for the program with a 1% cut across the board on non-defense discretionary spending. Depending on whether or not War on Terror funds are included, this cut represents a savings between $4 to $6 billion. The corporate tax cut could reduce revenues upwards of $30 billion alone.

While the math may not add up now, Garrett adding more than simply corporate tax cuts to his proposal shows he's taken heed of the criticisms leveled at his last effort. It's a positive step forward for our Congressman, and I wouldn't be surprised to see several of these proposals included in President-Elect Obama's final proposal.

Heal Thyself...

Happy New Year! To say I've been working so hard I didn't know what's going on is an understatement; my mother told me Eric Mangini was fired, and I'm fairly certain she didn't know who he was until he was fired.

However, now that I'm coming out of the blur, it's nice to know some things haven't changed. Representative Scott Garrett took to the House floor last night with several other Republicans to lay out their economic recovery plan.

Here it is: Heal Thyself.

Here's part of what Garrett said:

Finally, she made a good point as well, and I will close on this, market, heal thyself, is what she said. Likewise here, whether it's the credit market, the financial market or the unemployment market, we can allow the private sector, with the assist of the government getting out of the way for the market to heal thyself in those situations as well in the appropriate manner.

Now, I'm not in favor of forking over tons of taxpayer cash to CEOs who ran their companies into the ground; but doing nothing really can't be considered an option either.

The idea that the real economy functions in the ideological vacuum some seem to believe in is a bit dangerous. The government is going to have to address the lobbyist written tax policies that helped create this mess. The government is going to have to get it's own house in order in terms of waste and abuse of taxpayers. The government is going to have to figure out a way to undo the education, health care, and trade policies that have put us at a competitive disadvantage.

"Heal thyself" is a bit simplistic for what we face. My hope is that Garrett won't stick his head in the sand on this one, and actually play a constructive part. We'll have to see.

Bailouts, no. Smart, real world policy, yes.

Shulman Karchers Garrett

Back in November of 2007, I pondered if it would be possible for Representative Scott Garrett to take the same sort of hell for his farming tax deduction that failed candidate Ellen Karcher did. Today, the campaign of Dennis Shulman answered the question with gusto:



Let the games begin...

CFG Loves SG and Deficits

Few special interest groups take such pride in openly talking about how they buy politicians with campaign cash as the Club for Growth. They do raise a tremendous amount money, but with only 1145 donors they'd have a tough time winning a town council race if they could pool their votes as opposed to their cash.

Pat Toomey, Bully in Chief at the Club, explains the Club's rationale for taking out Republicans in an Op-Ed for the Wall Street Journal today (emphasis mine):

Conversely, many of the Republican candidates the Club for Growth's members have supported over the years are now leaders in the conservative movement and favorites among the party's grass roots. Sens. Coburn and Jim DeMint and Reps. Scott Garrett, Jeff Flake, John Campbell, Jeb Hensarling, Tim Walberg and Mike Pence are just some of the brave leaders who have led the fight for limited government and greater economic freedom.

[snip]

A Republican majority is only as useful as the policies that majority produces.

Back in November I highlighted the CFG's policy goals. I double checked their website, and they haven't changed. As I've mentioned before a balanced budget and reducing the deficit play no role in the Club's stated goals. Here's how Toomey explained the rationale to Congress last year:

While shrinking the federal deficit is important, it is not crucial as an end in itself, but only to the extent that it serves as a means to another end—increasing prosperity and economic growth. At the end of the day, job growth, higher incomes, and gains in family wealth are more important than the number on the federal government’s ledger.

Since 2001, the Federal Deficit has mushroomed 63.3% to over $9.3 trillion . That works out to a little over $31,000 per citizen, and was equal to roughly 37% of the GDP last year. On a side note, I guess we shouldn't be surprised that Toomey seems to share Garrett's penchant for distorting facts (same link as above):

It is important to remember that the current deficit is only 1.5% of the Gross Domestic Product and decreasing by the day.

We spent $430 billion on interest payments in 2007, which was more than the entire non-defense discretionary budget. At some point, maybe during the campaign, Garrett and the folks at the Club would like to explain how it's beneficial to the taxpayer to have more than a third of their tax dollars going to pay interest instead of being kept in their own pockets.

Over a period of time, aggressively paying down the debt could lead to a reduction in taxes of 25-30%. Playing the same numbers game others do, this would reduce the "average" tax bill by between $2,700-3,300. Or, put another way, return around $300 billion a year to families without their children having to pay it back with interest and without loss of services.

This isn't even including any corporate cuts possible. How much could the economy grow with an extra $300 billion injected, per year? How many jobs would that create?

However, that's the sort of long term planning lacking with the cut and borrowers like the CFG and Garrett. It's unfortunate really. They love to beat their own chests, padding their personal checkbooks and campaign coffers by saying they're fighting the good fight to shrink taxes; when in fact the policies they advocate ensure taxes will always be higher than they need to be.

Garrett Shmorgishborg

So much to read, this is a round-up of Representative Scott Garrett and other news from the web:

*A lot is being made of the polls released by Camille Abate, and particularly Dennis Shulman, each shows Garrett being unknown and unpopular in the District, causing CQ Politics to remove our District from the Safe Republican category.

*Blue Jersey's Scott in NJ took the time to compile a great chart tracking the money race. It's no different surprise Garrett holds a large lead in cash on hand.

1. Garrett: $457,521.36
2. Shulman: $245,549.80
3. Abate: $103,193.05

*Garrett railed against government spending over at The Hill Blog. He and his colleagues at the RSC hope to introduce an amendment to tie spending increases to growth in the GDP. This is one way to defund the Iraq war in a hurry.

*Garrett also used a bit of revisionist history in his Op-Ed calling for the end to the AMT. He neglected to mention a patch could have been passed much sooner than it was, however Garrett was one who led the charge to protect a loophole enjoyed by less than 60,000 people at the expense of the millions impacted by the AMT.

That's it for now...

Democrats, Garrett and Taxes

Over at Blue Jersey this week there was a conversation about whether or not a Democrat could take the Fifth. A number of ideas crossed people's minds, largely centered around Representative Scott Garrett's social voting record. One thing that was missing, both from the comments on the original post and the response from Dennis Shulman's campaign, was a huge issue here in the Fifth: Taxes.

Our District is one of the most heavily taxed in the nation, and anyone running against Garrett is going to have to talk about it to get people listening.

Let's be honest, every time a Democrat talks about raising taxes on the most wealthy Americans to fund a program, they're talking about our District. Garrett's opposition to government expansion rings true with a lot of people, because they know they'd end up paying for it and haven't been happy with the return on investment at a lot of levels.

According to the Census Bureau, 46.9% of the families in our District make over $100,000 a year. This compares with 22.6% of the nation as a whole. The more popping figure are families making over $200,000. The nation has 4.4% at that level, where our District has 14.8%.

Although some could argue cost of living adjustments would be factored in, anybody who deals with the AMT knows that won't save our District from a higher bill. While Garrett has failed to deliver relief from the AMT, and actually voted against patching it at least once, it doesn't change the fact roughly 20% of the District are on the verge of having to pay it.

It is a primary issue for many voters in the District, and although completely ineffective in actually getting anything done to fix the AMT, people like what Garrett has to say about abolishing the AMT.

What also hurts Dems in our District is what happens with the State regarding property taxes. According to the Star Ledger, 17 of the top 50 towns in average property tax burden fall within the Fifth District. Camille Abate addresses the fact unfunded mandates and such raise people's property taxes when Federal dollars don't come through, but it's the last point on her issues page.

Garrett's philosophy of ending many Federal programs and returning "control" to the State is probably where Dems can make their greatest inroads. Not only has our return on the Federal tax dollar not improved with Garrett, but his voting record and statements are such that he wants more of the property tax burden to fall on our District's shoulders.

That's all well and good for a guy who has been accused of using a farm subsidy to lower his own property taxes. Since, supposedly, he's not paying his fair share now, it won't affect his bottom line if his neighbors have to pay more.

I guess my point in all of this is that Garrett's greatest strength, his verbal stand on taxes, needs to be turned into his greatest weakness. Things like his votes for deficit popping budgets; votes against small business tax cuts for owners in our District when they're among the highest taxed in the nation; and his votes against funding that will have to be replaced with property tax dollars are really how to make people rethink their support for him.

Garrett talks a good line on taxes, and any Dem that wants to take him down is going to have to show that Garrett is just that: Talk. Once a candidate establishes that, and people are listening, the rest of Garrett's record can be discussed.

Garrett Flips Quotes

In a clear case of flipping quotes on the stimulus package, Representative Scott Garrett seems to have changed his tune.

As Herb Jackson reported, this was Garrett's sentiment last week:

taxpayers would use too little of the rebate money on spending to make a real long-term difference in the economy.

Here's Garrett's posting yesterday to The Hill Blog:

Any time hardworking Americans are able to keep more of their money, our economy wins.

I just wonder what his sentiment will be when the conference report on the stimulus package is voted on in the House.

The Borrowers Win

The AMT bill without any offsets to prevent further borrowing was passed by a whopping majority. This is a good thing for the taxpayers next year, but a bad thing down the line. It also does nothing to change the fact 120,000 families in our District already pay the AMT. Representative Scott Garrett voted for the patch, and the continuation of our District's disproportionate share of the Federal tax burden.

Could Garrett Get Karcher-ed?

Here's a thought I had while looking at the Record's list of cut your own Christmas Tree farms: Could Representative Scott Garrett be subjected to the same sort of attack that helped bring down State Senator Ellen Karcher? Part of what undid Karcher was a tax break she receives for having her property designated as a Christmas Tree farm, contrasted to her votes raising taxes.

While Garrett has never declared income from the farm on his House Financial Disclosure forms (over $200 from any source must be declared), both Garrett's supporters and detractors seem to be of the impression he sells the $500 worth of Christmas trees a year in order to get the property tax break. Garrett doesn't seem like the type to risk an $11,000 civil fine for each report falsified, plus fines from the House itself, so I don't think folks should jump to conclusions about the status of Garrett's property taxes. Plus, people have to decide if this is the sort of thing we want in campaigns.

Regardless of whether or not he gets a break, Garrett's voting record and philosophy do in fact lead to higher property taxes. For instance, Garrett has been on record since at least 2002 as saying he felt that the Department of Education should be eliminated. While it varies on a town by town basis, 8.9% of education funding comes from the Federal government. So, in essence, Garrett's been committed to raising property taxes an average of 8.9% since 2002.

That last bit may be a bit of a stretch for folks, but people need to consider when Garrett talks about eliminating Departments and programs like Head Start; states, counties, and towns will be left to fund them on their own or end them. When Garrett opposes SCHIP funding, leaving the state to cover those children already covered, the money has to come from somewhere. In our state, that means property, income, and sales taxes.

It's something to think about.

Republican Primary Wars

With the announcement by Representative Mike Ferguson that he'd be retiring, NJ's political class (PolitickerNJ, Blue Jersey, Red Jersey, Conservatives With Attitude) has started full tilt speculation as to who is going to run.

This is likely to be a heck of a fight between the Conservatives and moderate Republicans. AJ Sparxx over on CWA-NJ has already started beating the Conservative drum:

Now is the time to find a Conservative to win this seat and take it away from a moderate like Ferguson, keep it out of the hands from a moderate like Kean, Jr. and most importantly, keeping the Democrats from picking it off.

One group that is likely licking their chops is the Club For Growth. Back in September, they were already very pleased with their prospects for next year. The question is, outside of our District where they spend and raise a ton of money backing Representative Scott Garrett, how successful can they be in New Jersey?

Robert Novack pointed out that The Club was "founded to support conservatives and punish liberals in Republican primaries." They claim 40,000 members, and their bundling ability is rivaled by very few. Even though it seems they've only given Garrett $16,192 in donations, it's nearly impossible to guess how much of the $4.6 million he's raised over the years have come from Club members. I'm sure they let him know, which likely is why he switched his vote on Greenwood Lake funding once they came out against it.

The Club cost Republicans the Senate with their attacks on former Senator Lincoln Chaffee, and they are already targeting several Republicans. As with Rhode Island, we're a relatively blue state with several purple Districts, so it would be interesting to see how their tactics play here. Here's their list of priorities:

Club for Growth Policy Goals:

• Making the Bush tax cuts permanent
• Death tax repeal
• Cutting and limiting government spending
• Social Security reform with personal retirement accounts
• Expanding free trade
• Legal reform to end abusive lawsuits
• Replacing the current tax code
• School choice
• Regulatory reform and deregulation

Notice balancing the budget, paying down the deficit, fixing the AMT and creating jobs are not on the list. As I pointed out earlier, the Bush policies Garrett pledged to back have caused the deficit to grow and the dollar to sink. I suppose it could be called the "Club for Foreign Wealth and Power Growth."

The point is, Republicans (and Democrats for that matter) in the 7th, 3rd, and here in our Fifth need to fight to have a Representative who isn't a slave to the special interests. While the Club's 40,000 members can raise a lot of money and they'll spend a lot on ads calling people names, a Representative in NJ has about 700,000 constituents.

Garrett's a lost cause on this front, but in the interest of a better government and economy, my hope is that the Reps and Dems running in those Districts will put the special interests aside. Voters there should demand it. An open seat is the ultimate chance to change politics as usual. We'll have to see what primary voters make of the opportunity.

Garrett Against $14.7 Million for Bergen

Here's an interesting fact:

With Representative Scott Garrett voting against the Appropriations for Departments of Transportation, and Housing and Urban Development; Garrett could cost Bergen County $14.7 million dollars in Community Development Block Grants. That works out to roughly 3.4% of the County budget.

It's unlikely, when the dust settles, that we'll lose the entire amount, but what's that going to do to property taxes? What about the transportation funds Garrett voted against? How much of the budget are we talking about? If only the Bergen County Freeholders had the decency to put the County Budget on-line I could answer that question.

As the appropriations battle goes forward, none of us should be surprised by Garrett's string of Nay votes. Garrett was the only Republican from New Jersey who signed a pledge to the President to oppose any Appropriations bill the President vetoes. In effect, Garrett has firmly placed the President's philosophy above the interests of our traditionally fiscally conservative District.

Garrett Votes for $1.5 Trillion Tax Increase

For the second time this week, Representative Scott Garrett voted against the people of our District. Today, the House voted against a temporary fix to the AMT to prevent it from creeping further into the middle class of our Fifth District and other parts of the country.

At issue, and why the bill was approved largely along partisan lines, is the provision changing the way 50,000 or so hedge fund managers are taxed. Currently, they pay at the 15% capital tax rate and avoid the AMT. Herb Jackson has the audio of Garrett's statement here, as well as Representative Bill Pascrell smacking his logic around.

As Garrett himself cited, 120,000 taxpayers in our District alone will be subject to the AMT without the patch Garrett just voted against. Here's how the Record broke down the impact not having a patch would have in our District:

If Congress takes no action this year, the alternative minimum tax would hit an additional 21 million taxpayers, including 1.5 million in New Jersey, with higher income tax rates. Here's what that would mean to a family in Ridgewood:

• Married couple, two children, filing jointly with $150,000 in income, $14,000 in property and state income taxes, $20,000 in mortgage interest and $500 in charitable contributions.
• 2006 federal tax bill: $18,690
• 2007 federal tax bill: $21,970
• Difference: $3,280 more

So even if every hedge fund manager in America lived in our Fifth District, which they don't, Garrett would put a $3,280 tax burden on 120,000 taxpayers to protect them? To be fair to Garrett, he has proposed a bill to completely eliminate the AMT. However, Garrett's bill has no chance of getting out of committee because it would cause the national debt to mushroom. This is another example of Garrett's lack of fiscal responsibility.

Playing the semantics game Garrett likes to play, by opposing the tax relief Garrett is in essence supporting a $1.5 trillion tax increase over the next ten years. We can add this to the list of assaults on the family budget by Garrett this year. How many families will see Garrett's lack of support for their family wallet as an issue next year should be an interesting story to follow, if not directly participate in.

Garrett Seeks to Increase Premiums on Flood Insurance

More often than not, when you see Representative Barney Frank next to our Representative Scott Garrett, the exchange goes something like this:

Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?

Mr. GARRETT of New Jersey. I yield.

Mr. FRANK of Massachusetts. Mr. Chairman, that, I must say, totally disappoints me. For the third time the gentleman has tried to put words in my mouth. The words ``trust in me,'' the gentleman read that, and the gentleman's distortion, systematic distortion, has gone beyond what I can deal with in a brief intervention. But I will say this: I continually said we should address that in separate legislation. If the gentleman doesn't know the difference between passing legislation which sets guidelines and saying ``trust me,'' then the gentleman understands less in this place than I had hoped he did.

Well, the two of them have teamed up to introduce the HR 3959, to reform the National Flood Insurance Program (NFIP). The Record did a good job of explaining problems with the NFIP program a while back. Here's how Garrett's office described the bill:

The Garrett-Frank bill, H.R. 3959, would require any new purchaser of a pre-FIRM primary residential home that costs over $600,000 to pay phased-in actuarial flood insurance prices using the same phased-in structure that non-residential and non-primary homes are subject to under legislation passed by the House earlier this month.

The bill calls for up to a 15% premium increase every year until the premiums reach actuary equality. The Independent Insurance Agents & Brokers of America (the Big “I”) has come out strongly in support of the bill:

“The Big ‘I’ strongly supports the NFIP gradually moving towards actuarially sound rates,” says John Prible, Big “I” assistant vice president for federal government affairs. “We recognize that the NFIP’s need for financial stability must be measured against fairness to the customers we serve, which is why we believe it is important that this legislation is aimed at homes valued at over $600,000 and includes a phase-in mechanism.”

The one question I do have is how residents in the Fifth will be impacted by this change? This may be the first time we've seen Garrett flat-out advocate increased fees for anything, usually he refers to rate increases as a new tax.

It also may be the first time he's aiming such an increase largely at the Bergen County part of the District, where inland home buyers here may end up subsidizing flood insurance for beachfront homes elsewhere. Flood insurance is mandatory in certain areas, and a look over the flood maps lets you realize how this proposal may further increase the costs of home ownership in our District.

This is a continuation of an amendment Garrett had hoped to introduce last month when Congress expanded NFIP to include wind damage. Here's how the Express-Times described Garrett's efforts:

However, it's likely an increase in premiums for homeowners with houses worth more than $600,000 would have constituted a poison pill, making the bill unpalatable for officials from states with high property values and lots of shoreline, e.g., New Jersey.

Admittedly, flood insurance is something I have a very cursory knowledge of, and so this will be one of those issues requiring follow-up on my part. In the meantime, we can't over look the fact he's working with Rep. Frank.

Garrett: Housing Market is Good

Representative Scott Garrett and Representative Paul Hodes appeared on C-SPAN yesterday for nearly an hour. Among many points: Garrett said he believes the overall housing market is in good shape (you have to see it to believe it); said he supports the PAYGO rules he voted against; and stared a hole in his notepad while being asked and then completely dodged a question at the end about the fairness of non-working people making $9 million a year from trusts being taxed at 15%.

For perspective on that last one, the median household income in our District is $84,443, putting those households in the 28% tax bracket. With the disproportionate amount of families within our District paying the AMT, that number does not drop off due to deductions.

For those not having time to watch the show (here's the link again), or the inclination, the folks over at Red Jersey have started their own video channel on YouTube. Their first Garrett video has him talking about Iraq, partisanship, No Child Left Behind and the fact he doesn't want Bush to campaign for him next year.

Pre-Tax Commuting

For my 100th post, I've decided to cover something near and dear to my heart: Commuting Costs. After dropping the cash for my various monthly commuting passes today; I find myself once again wondering why the two-plus hours a day I spend on mass transit are not completely pre-tax cost. Currently, the limit on pre-tax transit benefits is set by Congress at $105 dollars. Here's the bit of the tax code that makes it possible:

Qualified Transportation Fringe. For taxable years beginning in 2005, the monthly limitation under § 132(f)(2)(A) (regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass) is $105.

For those that don't receive TransitChecks, or one of their cousins, the $105 is deducted in a pre-tax manner the same as contributions to a 401(k), flex account or health insurance premiums. For the hundreds of people that use the exact same methods of travel I do, our commute from our NJ Transit rail zone into lower Manhattan costs $426 dollars a month ($5,112 per year) including the mass transit and parking. Those that live further away from New York City pay even more. I know several people paying a few hundred dollars more.

That's no small chunk of change to be shelling out every month. It appears that the House is looking to expand the credit to $175, via HR 1300 (Title V, Sec. 501). On behalf of the tens of thousands of my fellow commuters, I'd like to say we appreciate that greatly. However, at the same time why not let us cover the whole thing pre-tax?

There are so many benefits to commuters, employers and taxpayers.

For commuters, it's more money in their pocket and a lower tax liability.

For employers, it's happy employees and a lower tax burden.

For taxpayers, assuming the benefit attracts more riders, it's less spent for highway repairs from heavy road usage and would push the mass transit systems closer to the black; thus reducing federal subsidies.

Those are just a few of the benefits, and there are so many more. It wouldn't be that hard to implement, because many transit benefit providers already send passes directly to employers for distribution. My co-workers receive their Metro-Cards directly from TransitChecks, who delivers them to our company, and I'm sure those who provide the service would have no problem tracking down my passes if they were completely covered.

Currently, New Jersey Representatives Steve Rothman, Donald Payne, Rush Holt and Albio Sires are co-sponsoring the entire Bill. At a bare minimum, I would hope the entire New Jersey Delegation could figure out how to word and co-sponsor an amendment to increase the ceiling. There is not a District in our state where some portion of the population doesn't use some form of mass transit. Pull in those Representatives from New York, Connecticut and the eastern part of Pennsylvania and you've got a powerful block of votes.

I realize that some of the Republican delegation will not vote for this particular bill regardless of how many voters they'll make happy. It's ok. They can vote for a full pre-tax amendment but vote against enacting the amended Bill; as Representative Scott Garrett did with his SOX compliance deadline extension amendment. They'll still get to send out the press release saying they supported bringing relief to commuters who are doing the right thing by using mass transit.

Contact your Rep and let them know you'd like the full amount pre-tax.

Contacting our Delegation:
01 Robert E. Andrews D
02 Frank A. LoBiondo R
03 Jim Saxton R
04 Christopher H. Smith R
05 Scott Garrett R
06 Frank Pallone Jr. D
07 Mike Ferguson R
08 Bill Pascrell Jr. D
09 Steven R. Rothman D
10 Donald M. Payne D
11 Rodney P. Frelinghuysen R
12 Rush D. Holt D
13 Albio Sires D