Surprise! NJ’s Democrat Governor Wants $1.6 Billion Tax Hikes
Progressive agendas cost money. Lots of it.
New Jersey Governor Phil Murphy (D) has proposed his first budget, and it’s loaded with new taxes and tax policy that is intended to raise approximately $1.6 billion in new tax revenue.
The tax increases are being met with mixed reactions from New Jersey Democrats; some favor the proposals, some don’t think they will raise enough money for Murphy’s progressive agenda, and some are opposed to a key new tax, the millionaire’s tax.
Gov. Phil Murphy unveiled an ambitious progressive agenda Tuesday when he pulled back the curtain on his $37.4 billion state budget proposal.
The spending plan is a $2.7 billion jump over the state’s last budget signed by former Gov. Chris Christie, a Republican.
Murphy, a Democrat, wants to, among other things, fully fund schools and the state’s ailing pension system. Other items include free community college for some residents and boost funding for NJ Transit.
Of course, all of that takes money.
Murphy’s blueprint includes some $1.6 billion in new taxes to fund his ambitious agenda.
Among the proposed tax increases are: an increase in the sales tax, taking it back to 7%; new taxes on Uber, Lyft, Airbnb, online sales, and recreational marijuana (not currently legal in NJ, by the way); a millionaire’s tax; and the closing of corporate loopholes.
Mr. Murphy said that his proposal relies on several new taxes: restoring the state sales tax to 7 percent from 6.625 percent, closing the carried interest tax loophole and raising the marginal income tax rate on those making over $1 million to 10.75 percent from about nine percent.
The so-called millionaire’s tax has become a political lightning rod for the governor as his nascent administration navigates entrenched political power bases in the state Legislature. Stephen M. Sweeney, the Senate president, opposes the new tax and he has numerous allies who often vote with him.
While Mr. Christie was still in office, many Democrats, including Mr. Sweeney, supported Mr. Murphy’s proposal to raise taxes on the wealthy. But because the new federal tax law caps a key tax deduction on property taxes and mortgage interest, Mr. Sweeney and other Democrats argued that any new tax would be untenable.
The standoff has soured the already frayed relations between Mr. Murphy and Mr. Sweeney. Last week, Mr. Sweeney announced a proposal to raise taxes on corporations. Mr. Murphy called the proposal interesting, but vowed to pursue his proposal. This will likely be the biggest sticking point during budget negotiations for the next fiscal year, which starts on July 1.
Given this dynamic and the need for the budget to be passed by the New Jersey senate, the proposed millionaire’s tax is unlikely to stand. This means that New Jersey will eventually see new taxes or tax increases in areas that don’t hit the politically-connected.
It seems unavoidable that New Jersey’s middle classes will be hit with new and increased taxes to pay for Murphy’s progressive agenda.
The NYT continues:
“For everyone who cares about common-sense gun safety laws, a 100-percent clean energy future, women’s health care, the rights of our L.G.B.T.Q. brothers and sisters, or immigration policies that are sensible, that allow diverse and safe cities to flourish, the pull of New Jersey will become inescapable,” Mr. Murphy said.
Reuters has more details about Murphy’s progressive agenda.
Murphy’s campaign pledges included raising the minimum wage to $15 an hour, increasing school aid, making community college free and divesting state investments in hedge funds.
“This is a watershed moment in the state’s history,” said Brigid Harrison, political science professor at Montclair State University in Montclair. “The governor went into this making all kinds of promises … all of which cost money.”
While Murphy dreams of brand new taxpayers unable to resist the pull of a progressive New Jersey, the president of the New Jersey Chamber of Commerce notes, “All of his funding proposals need to be fully vetted and analyzed in the context of keeping New Jersey competitive and affordable.”
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A few years back, a NJ billionaire type got fed up with being targeted by the legislature and packed up and moved to Fl. The NJ legislature then had to reconvene and rework the state budget to allow for this loss of plunder. NJ seems to want to become Illinois or Ca. it looks like. If “progressives” run the state long enough, it will.
A significant portion of NJ’s million+ annual earners are money managers who can ply their trade anywhere. 10.75% is obscene.
See CT for an example of how well “millionaire” taxes work.
New Jersey seems to want to drive all the wealthy people out of their state. More power to them. Any wealthy person or even middle class people with any sense should have their bags packed already. It is easy to see the progressive train wreck coming.
The train wreck is NJ’s pension system which is 37% funded and its credit rating which is ranked 49th… trailing only IL.
Is it me, or does the man look like he doesn’t floss?
“…the rights of our L.G.B.T.Q. brothers and sisters…”
I’m confused. As American citizens, exactly which rights do they not have?
Also, if they are “Q”, isn’t it inappropriate to say “brothers and sisters” now?
“All of his funding proposals need to be fully vetted and analyzed in the context of keeping New Jersey competitive and affordable.”
Hey, if you wanna live in utopia, you have to pay for it.
I’m presuming the Democrats had mixed feelings about this tax increase; some thought it was not enough, and some thought it was not nearly enough.
Murphy/Booker 2020. You read it here first.
Murphy/Booker/T-Bone 2020
Chris Christie: “Miss me yet?”
By all means, go for it. Keep raising taxes until people move back to New York.
how does Joisy compare to NYC tax wise ?
They may move, but why would they move to Cuomo/DeBlasio’s New York if they are trying to avoid taxes and oppression?
This is what happens when the elections are diluted by zombie votes and ballot fraud. The majority of normal citizens have no voice and ultimately you get leadership not accountable to the people.
We really need to fix the fraud in voting or we are done. That should be priority number 1.
I’ve lived in New Jersey for 25 years. Trust me, taxes will be raised and none of the revenue will go to better government (however you conceive of it). Rather, it will be divvied up amongst the Public Employees’ Unions and the various cronies of the most powerful state legislators.
Because that’s New Jersey.
Oh, and Phil Murphy seems to ignore the 500-pound gorilla in the room, which is unfunded pension liabilities. A millionaire’s tax of 100% probably won’t pay for those.
“Murphy, a Democrat, wants to … fully fund … the state’s ailing pension system. Other items…” are not really important.
Clarified statement
Yeah, the unfunded liability is estimated at a little over $200 billion, or about six times the current state budget without free community college or any of the other initiatives Murphy wants.
He said he wants to fund the pensions, but he’s not serious. Just like Christie, Corzine, McGreevy, and Whitman (that’s as far back as I go) weren’t serious when they said the same thing.
He’s kicking the can down the road, as did his predecessors.
“All of his funding proposals need to be fully vetted and analyzed in the context of keeping New Jersey competitive and affordable.”
“Hey, if you wanna live in utopia, you have to pay for it.”
Say, have you heard about the Phil Murphy Special at McDonald’s? You get to order anything you want on the menu and the people in line behind you pay for it.
Jizyah and taqiyah
Hey, Fuzzy. Suggestion for Bi-line re-work.
“Progressive agendas cost other people’s money! A lot of it!”
I’d guess Venezuela is looking heavenly to the residents about now.
I have to wonder just how stupid the residents are that they continue to vote this kind of fascist into office.
“I have to wonder just how stupid the residents are that they continue to vote this kind of fascist into office.”
Stupid enough to stay there, apparently.
Not a dime of this revenue is likely to fund pensions. Generally these kinds of schemes just go towards padding public employee pay, and make the pension shortfall even worse because the pay increase results in higher pension payouts. If does “fund pensions”, watch for an increase in the pension formula attached to it. Sure, it’s “funding pensions”, but only to increase current pension payouts not make up the capitalization shortfall.