Rep. Tom MacArthur bought thousands of dollars’ worth of securities in gas and oil companies roughly one and a half months before he voted in favor of a tax bill that would give companies in the industry a direct, one-time tax break worth up to $25 billion.
According to periodic transaction reports, the two-term congressman bought between $40,012 and $250,000 in securities in four oil and gas companies in September, including the Chevron Corporation, which received a one-time benefit of more than $2 billion from the Republican tax bill passed late last year.
Chris Russell, a spokesman for MacArthur, who was the only member of the New Jersey congressional delegation to vote in favor of the tax bill, said the assertion the purchases and MacArthur’s vote were connected was ridiculous.
“Congressman MacArthur voted for tax reform because it delivered meaningful middle-class tax relief for an overwhelmingly number of New Jerseyans and, in fact, has already resulted in substantial bonuses and pay raises for front line employees in countless New Jersey companies,” Russell said. “The mere inference that his vote was tied to any personal gain is both outrageous and insulting.”
But this isn’t the first time MacArthur has faced such accusations.
Last year, MacArthur came under fire after it was revealed he held up to $800,000 of stocks in healthcare companies when he voted in favor of the American Healthcare Act of 2017, which would repeal and replace portions of the Affordable Care Act, commonly known as Obamacare.
MacArthur drafted an amendment that helped the Healthcare bill, which died in the Senate after making it through the House.
Aides to the congressman said at the time that the investments were made without MacArthur’s input, and House Ethics committee rules do not forbid members on voting on legislation that would affect companies in which they hold stock.
MacArthur’s holdings in the oil and gas companies are likely sparser than those he held in the healthcare industry. Because the disclosure forms present values in ranges rather than a discrete figure, it’s difficult to pin down the exact size of any given purchase.
From the October disclosure, it’s clear that MacArthur bought between $18,004 and $95,000 worth of Chevron stock, with some of the purchases being made by trusts for the congressman’s children. He also bought between $17,003 and $80,000 of stocks in Suncor Energy Inc., between $4,004 and $60,000 of corporate bonds in Diamond Offshore Drilling and between $1,001 and $15,000 in Amerigas Partners.
Most of the purchases were made on Sept. 12 and 13, while the Diamond buys came in a staggered fashion on Sept. 19, 26, 28 and 29. The Tax and Jobs Act was introduced about one month after the last purchases, on November 2.
Analysis by the Pacific Standard released in March found that 17 oil and gas companies reported $25 billion in direct, one-time savings because of last year’s Republican Tax bill. Chevron aside, the analysis did not include the other companies in which MacArthur purchased securities, so it’s not clear how they benefited.
The savings there came mostly from the application of the reduced 21% tax rate to deferred tax payments that would originally have been taxed at 35%.
These benefits are separate to the perpetual reduction in the corporate tax rate that the law provides.
Companies in the industry now also have the ability to deduct the full cost of some capital investments from their taxes in the same year they are made, a potentially hearty bump to an industry that sees among the highest level of capital investments of any sector. These deductions would begin to phase out in 2023, dropping to 0% in 2027.
It’s not clear MacArthur did anything wrong, but the Cook Political Report said MacArthur became more vulnerable after the revelation about his ownership of healthcare stocks.
The tax bill is unpopular in the state due to the cap it puts on deductions for state and local taxes, according to a Monmouth University Poll released last week. The poll has an upside-down 35%-46% approval rating in New Jersey.
“Most New Jerseyans feel like they’ve ended up with the short end of the stick from these tax reforms. That’s what makes this plan a particularly tough sell for Republican House candidates here,” Patrick Murray, director of the Monmouth University Polling Institute, said when the poll was released on April 15.