Why Murphy’s plan to raise NJ taxes might not go as planned
Gov. Phil Murphy’s budget proposal includes tax increases for millionaires, some profitable corporations, ride-sharing services like Uber and transient accommodations like Airbnb — as well as a slight bump up in the sales tax.
If these proposals are approved in the final budget that’s signed into law in June, the impact on the average Jersey resident would be slight, yet the governor may face an uphill battle in getting members of the public, and his own Democratic party to support them.
When asked about his proposed budget and the tax hikes that are called for during a stop in New Brunswick on Monday, Murphy said “there’s never been a budget that provides more relief to the middle class, and to the dreams of those who aspire to be in the middle class.”
“Whether it’s investment in infrastructure, education, including pre-K, community college and higher education, through any number of measures, this budget delivers overwhelmingly on the promises we made in the campaign," he said.
The biggest surprise in the budget? That there were very few surprises, Murphy said. So why then would he face any kind of serious objection to his plan, with a Democratic legislature on hand?
“Any tax is still a tax,” said Rowan University political science professor Ben Dworkin.
Dworkin, director of the Institute for Public Policy and Citizenship, pointed out most of the governor’s proposed tax hikes are very targeted.
“People who make $1 million, they’re going to pay a little more. Actually, if you make a million and one dollars, then you start paying more,” he said.
He also noted people that have businesses with multiple offices in different states, and have been shifting New Jersey profits to different states so they can pay different tax rates would also be affected
And if recreational marijuana gets approved in New Jersey, people using it will also pay a tax for it — but “since most people are not millionaires, don’t have multi-state businesses and are not pot smokers, they’re really not going to pay," Dworkin said.
He noted Murphy has also proposed a slight increase in the state sales tax, from 6.625 back up to 7 percent, but said the change is so minor “unless you’re buying a $100,000 sports car, you really aren’t going to notice that it’s gone up from 6.625 to 7 percent.”
He said tht means the vast majority of people would not be affected in any meaningful way.
“However, there of course is the word 'tax,' and everyone feels over-taxed anyway, and so they are sensitive to the word," he said.
Dworkin stressed “the pocketbook reality is that the average New Jerseyan will not be affected seriously by these proposed tax increases.”
He also said he expects the fovernor to use money from a super PAC formed last year to support his budget proposal in the coming weeks, by buying ads on TV and radio.
You can contact reporter David Matthau at David.Matthau@townsquaremedia.com
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