New Jersey taxes are so high even Democrat legislators oppose more increases. They sent a shocking message to Governor Phil Murphy Thursday by passing a budget that stripped out his tax hikes on millionaire’s, guns, and pain medication.
The legislative budget spearheaded by Senate President Steven Sweeney and Assembly Speaker Craig Coughlin is a $38.7 billion spending plan.
With only two weeks remaining until the start of a new fiscal year, Governor Phil Murphy has been sparring with legislative leaders over his “Millionaire’s Tax”. After hiking rates for income over $5 million last year from 8.97 percent to 10.75 percent, Murphy came back this year calling for additional tax hikes, not only on income, but also on gun owners, opioid manufacturers, and corporations.
The millionaire tax would apply the top marginal tax rate percent of 10.75 percent to income over $1 million, increasing the already-high tax burden on 18,000 state residents. This tax would cost taxpayers an estimated $447 million.
The legislative budget also axes Murphy’s aggressive fee hikes on firearms. The fees for firearm permits, firearm identification cards, and a permit to carry a gun would have increased dramatically under his proposal. These taxes disproportionally affect low-income residents, effectively taxing them out of their second amendment right.
Opioid manufacturers would have also been subject to increased fees if Murphy was able to have his way. He has claimed revenue from the fee would be used to “support the fight against the opioid epidemic,” however the tax would punish those with a legitimate need for opioids through higher costs. His fee would make it more difficult for those with cancer or chronic pain to get the medicine they so desperately need.
Corporations were in Murphy’s crosshairs for the second year in a row, as he pushed to impose a $150 fee on private companies for each employee enrolled in Medicaid. This would create a massive burden on businesses and could lead to lower wages and fewer benefits for workers, or the employer leaving the state altogether. It is these types of policies that have given the New Jersey the unwelcome distinction as having the worst business climate in the nation.
Taxpayers in the Garden State have found surprising allies in Sweeney and Coughlin, both Democrats. They have both rejected Murphy’s calls for more taxes, arguing that the state is already overtaxed and stating they wouldn’t agree to tax increases without cost-cutting reforms.
Murphy has expressed disappointment that his long-desired tax hikes were not included in the budget, and stated “every option is on the table”. He could sabotage the effort with his veto pen, or shut down the government – not an uncommon occurrence.
If Governor Murphy continues to push for tax hikes, even when his Democrat colleagues disagree, he’s putting his ego before doing his job.