Public Spending, Economic Opportunity for All
Wall Street Journal: New Jersey Does It Again
By The Wall Street Journal Editorial Board
Connecticut Gov. Ned Lamont’s yacht is coming in. New York City’s descent into disorder and lockdown are driving off the affluent class. Now with New Jersey Democrats again raising taxes on millionaires, Connecticut is looking like the least bad state in the region.
New Jersey Gov. Phil Murphy and State Senate President Steve Sweeney struck a deal on Thursday to raise the state’s top marginal tax rate to 10.75% from 8.97% on income of more than $1 million. Two years ago, Democrats increased the top rate to 10.75% on taxpayers making more than $5 million. Mr. Sweeney then opposed a lower income threshold because it would drive away millionaires.
But a “pandemic hit, and things have changed,” Mr. Sweeney said Thursday. They sure have, and New Jersey’s bleeding budget can’t afford to lose any millionaires. In 2018 New Jersey lost a net $3.2 billion in adjusted gross income to other states, including $2 billion to zero-income tax Florida, according to IRS data. More will surely follow now.
The millionaire’s tax is projected to raise $390 million in revenue, which Democrats plan to use to give $500 rebates to families earning less than $150,000 and $75,000 for single parents.
Sorry, single and childless millennials.
Eligible taxpayers will receive the rebates next summer, right before New Jersey’s 2021 gubernatorial and legislative elections. Does Mr. Murphy plan to sign the checks like Donald Trump?
In an amusing aside, New York Gov. Andrew Cuomo’s budget office on Thursday responded to the New Jersey news by issuing a statement boasting that New York City’s combined top state and city income tax rate of 12.6% (technically 12.696%) will still be higher than New Jersey’s new rate. Mayor Bill de Blasio wants to raise it even higher.
Meantime, Mr. Lamont has been working to attract high earners and businesses to Connecticut. Perhaps he should pay his Democratic neighbors a finder’s fee.