During last year’s governor’s race in New Jersey, MSNBC’s Chuck Todd asked then-candidate Phil Murphy (D), “Nobody that makes less than half a million dollars a year is going to get a new tax?”
“You’re not going to get taxed,” Murphy replied.
Well, surprise, surprise! That turned out to be an absolute lie.
Tax-and-spend Murphy recently unveiled his 2018 budget plan, and New Jersey taxpayers—rich, poor, and middle-class—will all be footing the bill for his outlandish spending. Remember, New Jersey is already the 3rd highest-taxed state in the country, with the average resident paying 12.2% of their income in state taxes. With a newly-unveiled tax on Uber and Lyft, getting around New Jersey without owning a car will cost a heck of a lot more. Those services, together with Airbnb, will no longer be exempt from the sales tax.
Worse still, the sales tax will rise back to 7%, after it dropped to 6.625% to offset a gas tax hike in 2016, a measure to fund New Jersey’s exhausted Transportation Trust Fund. The Observer reported in August that Murphy’s tax proposal did not include rescinding the sales tax cut, according to a statement from his campaign spokesman. Of course, that turned out to be another lie.
While it is not getting much attention, the most disastrous part of Murphy’s proposal is the “millionaires’ tax”, which would raise the marginal tax rate 10.75% for those whose annual income tops $1 million. Not a big deal, right? Who cares about those 40,000 wealthy taxpayers? After all, polls have shown overwhelming support among New Jersey residents for the “millionaires’ tax.” Not surprisingly, New Jersey’s tax code is already one of the most “progressive” in the nation: the state forces the wealthiest 100 taxpayers to pay 5.5% of its income taxes. The top 1% pays an astronomical 40% of state income taxes.
But in actuality, such a tax will ultimately hurt all residents. New Jersey’s taxes are already astronomically high. Adding a “millionaires tax” in the aftermath of the GOP tax bill (which hurts taxpayers in high-tax states) penalizes its most successful citizens, and will only hasten their self-imposed exile from the state.
Since 1993, the state has suffered a net loss of $35.2 billion in income, largely deriving from residents who made over $200,000 per year. After the top marginal tax rate was increased from 6.37% to 8.97% in 2004, the annual loss of income doubled. Raising the rate to 10.75% would only worsen the situation. The State of New Jersey would therefore take in less taxpayer money per year, and would likely require a middle-class tax hike to fund Phil Murphy’s monstrous budgets. For every $1 million earner that flees the state, it takes 59 taxpayers earning $50,000 to repay that lost revenue. For each billionaire that flees, it would take 70,618.
New Jersey cannot afford to lose more revenue—the state pension system is a mind boggling $124 billion in debt—and taxpayers cannot afford a penny more in government theft. The people of New Jersey are being taxed to death, and the new Governor—like his predecessor—does not seem to care. The state will continue to deteriorate, with its institutions going bankrupt and its best and brightest moving away.
The answer is to cut taxes and spending, not to raise taxes and spending. The government should be incentivizing businesses and individuals to move to the state. Lowering the corporate and personal tax rates could very well end up increasing tax revenues in the long run, with business growing and the wealthy choosing to remain in the state.
Citizens of New Jersey, remember this: the people raising your taxes are the same people who complain about the GOP tax bill increasing your tax burden. Gov. Phil Murphy is a hypocrite, and I, as a future New Jersey taxpayer, can only hope that the legislature stops this atrocity of a budget.
The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.