NJ Gov. Phil Murphy looks to plug budget holes by taxing millionaires, corporations
The state is facing a nearly $6 billion budget shortfall
New Jersey’s Democratic Gov. Phil Murphy unveiled his fiscal 2021 budget on Tuesday that aims to help plug a nearly $6 billion budget hole through a variety of revenue-raising measures – including renewed calls for a millionaire’s tax, among other rate increases for corporations and wealthy residents.
“This budget proposal is not simply about getting New Jersey back to where it used to be, but moving forward to where we need to be by building a new economy that grows our middle class and works for every single family, while asking the wealthiest among us to pay their fair share in taxes,” Murphy said in a press release.
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Murphy pitched his millionaire’s tax earlier this year – making Tuesday his latest attempt.
According to the budget and consistent with past proposals, Murphy wants to raise taxes on this group to 10.75%, from 8.97%. The change would be effective starting in tax year 2020.
The higher rate is currently applied to those earning incomes more than $5 million.
The hike, according to Murphy’s office, would raise $390 million in fiscal 2021.
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Further, Murphy proposed charging individuals with qualified business income – who can take advantage of a 20% deduction under the Tax Cuts and Jobs Act – a 5% surcharge. This surcharge only applies to people earning more than $1 million.
In addition to the new rates for millionaires, Murphy also wants to permanently include a 2.5% surcharge on corporations, restore a sales tax on limousines, raise firearm fees and remove a tax cap on boats, among other measures.
The budget also includes a proposal pushed by New Jersey Sen. Cory Booker called “baby bonds,” which aims to help families save. Tens of thousands of babies born in 2021 to families with incomes below a certain threshold will receive $1,000 – money that can be withdrawn when the child turns 18 with the intent of helping the family pay for higher education and other “wealth-generating” activities.
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JPMorgan CEO Jamie Dimon weighed in on the millionaire's tax during an interview with FOX Business earlier this year, saying it's a bad policy that is hurting the people it is intended to help.
“They’re doing things that hurt the people,” Dimon said. “And so yes, you may get some billionaires out that you don’t want there, stuff like that, but you want jobs, you want production, want your school to work, you want infrastructure.”
As previously reported by FOX Business, New Jersey had the highest number of outbound migrations of all 50 states last year – at a rate of 68.5%. And the highest percentage of residents that left the state were wealthy, with nearly half of all outbound migrations occurring at income levels of $150,000 or more.
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