APP.com: Murphy’s budget plan more depressing news for NJ’s middle class

Some context is in order for assessing Gov.  Murphy’s third annual budget, which he unveiled today with a renewed call for a millionaire’s tax. The tax will help fund his proposed $40.85 billion budget, which is 5.5% higher than the one he signed into law last year and 17.7 higher than his first spending proposal two years ago.

As if a reminder is necessary, New Jersey has the highest property taxes in the nation. It has the worst-funded state retirement plan in the country. It has the worst business tax climate in the U.S., according to the 2020 Tax Foundation rankings. Its hostile tax climate has been blamed for New Jersey having the largest gap between people moving out of state and those moving in. Unfortunately, many of those moving out are among the state’s wealthiest, who chose to take their wealth to tax-friendlier climes, denying the state their contribution to state coffers.

Wealth inequality is a major problem in this country.  But it should be addressed at the federal level, not at the state level, where high income tax rates put states such as New Jersey at a competitive disadvantage.  New Jersey’s top rate of 10.75% is the third-highest in the nation, behind only California and Hawaii. Lowering the threshold to $1 million from the current $5 million, as Murphy has proposed, will only serve to make New Jersey less attractive to the wealthy and to companies with highly paid executives.   

Yes, the context matters. But not so much, apparently, to Murphy, who dismisses the idea that taxing the state’s wealthiest residents will hasten their departures to other states.  And as evidenced by his latest budget proposal, he continues to cling to the fiction that New Jersey will somehow grow its way of its fiscal doldrums — even in light of pessimistic growth forecasts nationally.

Read the full editorial here.