By Matt Rooney
Governor Phil Murphy wants a new and more dramatic millionaire’s tax, Save Jerseyans. The idea is that there are enough rich guys and gals left in New Jersey to fund ever-increasing spending and legacy costs (pensions, health benefits, etc.).
It’s not true. The proof is in the pudding.
This week, the N.J. Treasury issued its monthly revenue report (click here) and the news is once again ominous.
“The report is a not very subtle recognition of the weak state of our economy and a climate that is hostile to taxpayers and job creators,” said Garden State Initiative (GSI) president Regina M. Egea who analyzed the data. “But what should concern lawmakers and the public is this Administration’s doubling-down on the same policies that have our state at this tipping point.”
Among the troubling revelations? Projected growth of Gross Income Tax (GIT) revenue has been downgraded from 5.4% to 3.5%, further evidence of a weakened economy that remains extremely vulnerable to a future economic downturn.
But aren’t higher taxes supposed to correlate to higher revenues?
“The lowering of Gross Income Tax revenues by over $415 million, which counted on a higher millionaire tax rate, coupled with a dependency on corporate tax revenues, especially financial institutions, leaves our state in a very precarious position if more jobs flee as apparently millionaire revenues are,” GSI explained in its overview of the treasury report.
Said another way: the existing millionaire’s tax (which Murphy just hiked last year from 8.97% to 10.75% on income over $5 million) isn’t living up to the hype.
Even our neighbor New York (which infamously experimented with millionaire’s taxes) is in trouble for having treated millionaires like dairy cows, so much so that even liberal Democrat Governor Andrew Cuomo is raising the alarm and expressing apprehension.
Why would Murphy’s newest plan — to create a 10.75% marginal tax rate on any income over $1 million — end any differently than it has in N.J.? N.Y.? And everywhere else it’s tried? Murphy’s new proposed expansion is supposed to cover 18,000 New Jersey taxpayers and bring in $447 million more for FY 2020. Don’t get your hopes up regarding that last part.
MATT ROONEY is a practicing New Jersey attorney, regular panelist on Chasing News with Bill Spadea, and the founder and blogger-in-chief of Save Jersey.