Op-Ed: Legislature’s Budget Takes Different Lane Than Murphy, Stays On Same Highway to Tax Hell

By Grover Norquist and Doug Kellogg


If there was any hope that Trenton would avoid driving New Jersey further down the highway to tax hell, it is fading fast.

The New Jersey State Senate and Assembly are moving forward on a package of budget legislation to counter Governor Murphy’s tax-filled executive budget proposal.

The measures boosted by Senate President Sweeney and Assembly Speaker Coughlin would
hammer New Jersey families and businesses with over $1 billion worth of tax hikes. Democrats,
who control both chambers, pushed legislation out of committees on party line votes.

While the legislature’s budget avoids Governor Murphy’s massive sales tax hike, and increase in the “millionaire’s tax” (which also hits people earning less than $1 million), it includes a huge, uncompetitive increase in corporate taxes, while keeping a host of Murphy tax hikes.

Instead of working to make New Jersey more affordable and attractive, the conversation is about how to make the state more unaffordable and uninhabitable.

New Jersey already has the worst business tax climate in the nation, according to Tax Foundation rankings. Yet, the legislature wants an $850 million-a-year corporate tax hike that only speeds up the state’s journey in the wrong direction.

Companies, earning more than $25 million annually, would be hit with a 4 percent surcharge – giving New Jersey the highest top corporate tax rate in the nation at 13 percent. Companies earning just $1 million annually would still be hit with a punitive 2.5 percent surcharge.

Senator Sweeney justifies this with talk about federal tax relief giving New Jersey businesses an underserved windfall. This is a misguided perspective.

Federal reforms have companies investing in the state, providing bonuses and new jobs, all of which boost state revenue without need for a tax hike. (Americans for Tax Reform tracks this information for New Jersey and the country at ATR.org/list).

By making it more difficult for job creators to stay in New Jersey, the legislature’s corporate tax hikes will backfire. They may be set to expire after two years, but betting on government letting a revenue grab disappear is foolish.

The legislature wants to keep Murphy’s taxes on ride-sharing services like Uber, and home-sharing companies like Airbnb, which only drive up costs for middle-class New Jerseyans who rely on them. Higher costs are likely to mean less rides, and that limits opportunity for drivers.

Taxes on vaping remain as well. Murphy’s proposal was so reckless it could have killed the industry in New Jersey. The legislature has improved on the worst possible outcome, and their new tax would still threaten to close needed small businesses and kill jobs.

Their plan even adds a new money-grabbing fee on plastic bags, which hurts low-income residents who can least afford such a burden.

The Democrat legislative majority plan would end up hammering taxpayers just like Murphy’s plan because both do little to find savings, and a lot to increase spending.

The Senate and Assembly plan increases spending on NJ Transit by $170 million, adds $345 million in additional school aid – where more is never enough, and makes a $700 million increased pension contribution without long-term reform.

Republican legislators have stood strong, but Democrats who can see faults in Governor Murphy’s $1.7 billion slate of tax hikes have followed a similar path anyways, moving burdens around seemingly out of political self-interest, not in the interest of protecting taxpayers.

New Jersey taxpayers have had enough. The constant tax hikes have to stop before nobody can afford to live and do business in the state.


Grover Norquist is President of Americans for Tax Reform (ATR); Doug Kellogg is State Projects Director at ATR.