Trump tells New York to rethink tax laws after New Jersey kills millionaire's tax
President Trump praised legislators in New Jersey after the state’s Democratic Gov. Phil Murphy officially signed on to a state budget over the weekend that did not include his pet tax project – which would have raised rates on people earning more than $1 million.
Trump said the decision would keep “many” who were “planning to leave” in the state, while he encouraged other high-tax states to rethink their tax laws.
The $38.7 billion fiscal 2020 budget approved by Democrats in the state legislature did not include the millionaire’s tax, which was one of Murphy’s top campaign promises.
Murphy renewed a push to implement the tax – with a top rate of 10.75 percent – on people with incomes over $1 million. However, amid disagreements with the state legislature, which threatened to shut down the state government, Murphy agreed to sign the budget over the weekend.
While Murphy praised the plan as a “victory for working class families,” he also said it lacked “tax fairness.”
“Make no mistake, I will continue fighting for tax fairness and fiscal responsibility well beyond today’s budget actions,” he said in a statement.
An agreement on the budget needed to be reached before the start of the new fiscal year on Monday.
The $38.7 billion fiscal 2020 budget approved by Democrats in the state legislature did not include the millionaire’s tax, which was one of Murphy’s top campaign promises.
Murphy renewed a push to implement the tax – with a top rate of 10.75 percent – on people with incomes over $1 million. However, amid disagreements with the state legislature, which threatened to shut down the state government, Murphy agreed to sign the budget over the weekend.
While Murphy praised the plan as a “victory for working class families,” he also said it lacked “tax fairness.”
“Make no mistake, I will continue fighting for tax fairness and fiscal responsibility well beyond today’s budget actions,” he said in a statement.
An agreement on the budget needed to be reached before the start of the new fiscal year on Monday.
The current top income tax rate on individuals in New Jersey is more than 8 percent, as it is in neighboring New York.
The SALT cap has hit high-tax states like New York, California and New Jersey particularly hard. As a result, affected residents have begun to move to other states – a trend that experts expect to accelerateOpens a New Window..
The Treasury Department also recently squashed a workaround these states had been using to try to circumvent the cap – applying extra pressure to state lawmakers.
New York Gov. Andrew Cuomo said his state was seeing “significantly lower tax receipts” as a result of the SALT changes. New York Lieutenant Gov. Kathy Hochul said the changes decreased revenues and increased taxes on the middle class.
As previously reported by FOX Business, for New Jersey residents who aren’t able to up and move to tax havens like Florida or Nevada, Pennsylvania could be a local option.
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New Jersey Rep. Josh Gottheimer was one of several lawmakers from states including New York, Illinois and California who took to Capitol Hill last week to air out their grievances against the new SALT cap. Gottheimer called the cap a “double-taxation grenade” that was “lobbed at New Jersey and other high-tax states” by so-called “moocher states.” The average SALT deduction claimed in Bergen County, New Jersey, was more than $24,700 before the implementation of the cap.
While the fiscal 2020 budget did not implement Murphy’s millionaire’s tax, it did grow investments in NJ Transit, education and “many other middle-class priorities,” the governor said.