|
Yesterday’s news out of Trenton had Snooki, Springsteen, and Tony Soprano speed-dialing their accountants: New Jersey officials agreed on a “millionaires tax” as part of the state’s next budget.
The details: It's a budget plan that would feel at home in Sherwood Forest. New Jerseyans earning over $1 million would be taxed
at 10.75% (currently the rate for those earning > $5 million), up
from 8.97%. Most of the revenue generated would be funneled into annual
rebates of up to $500 for families making less than $150,000.
This is a hard-fought win for Gov. Phil Murphy
He first vowed to raise taxes on the wealthy when he took office three years ago...but ran headlong into opposition, including from within his own party (Democrat).
- What changed? A little
heckraiser known as Covid-19. Over 16,000 New Jerseyans have died from
the virus, and more than 1.5 million have filed for unemployment
benefits since Murphy implemented a lockdown.
Now NJ
leaders are saying middle-class residents have suffered so much from the
pandemic, it’s only fair to ask the wealthy to chip in a bit more.
Zoom out: The
pandemic is crippling many state budgets. High unemployment, diminished
tax revenues, and battered tourism and oil markets could snatch $200
billion from state purses by June 2021, per the Urban Institute.
- New Jersey has tried to gin up some cash by taxing financial transactions...to which the NYSE said, “We leave the party the second that guy shows up.”
And that's exactly the problem, say Republicans and biz leaders
They argue
the steeper tax will send New Jersey’s rich scattering to the four
corners of South Beach. “Governor Murphy’s plan to raise taxes is a gift
for the Florida economy and a nightmare for New Jersey,” said Assembly
Minority Leader Jon Bramnick.
Bottom line: When
the economy goes south, states don't hesitate to raise taxes. At least
10 states raised taxes in the years following the Great Recession to
shore up their finances, per the NYT.
|
No comments:
Post a Comment