September 14, 2020
To: Members of the New Jersey State Legislature
From: Americans for Tax Reform
Re: Oppose Tax Hikes in Budget
On behalf of Americans for Tax Reform and our supporters across New Jersey, I urge you to reject the tax increases proposed by Governor Murphy as you negotiate a final budget.
The Governor’s budget would add $4 billion in new debt, and increase taxes by over $1 billion over a period of less than a year. It would do so in the middle of a pandemic, exacerbating the economic consequences being felt by New Jersey residents and businesses.
In a sign of the Governor’s disjointed fiscal management, his turn to tax increases comes after the state already secured the ability to issue $9.9 billion in bonds, through a plan that will likely impose a statewide property tax surcharge on New Jerseyans.
Yet, Gov. Murphy refuses to come up with a plan that doesn’t include even more spending, debt, and taxes that families and businesses cannot afford.
Once again, a millionaire’s tax is on the table, which would affect people who earn $1 million to $5 million annually. This proposal promises to drive out more high earners and employers. As the Garden State Initiative has documented, the Governor’s own revenue estimates for this tax are getting lower as people flee.
The Governor’s plan would also make the temporary Corporate Business Tax surcharge permanent. Another so-called temporary tax becomes permanent, to the detriment of New Jersey’s ability to attract and retain employers.
Gov. Murphy also proposes another surcharge, adding a tax on Qualified Business Income in an attempt to undo progress made under the Tax Cuts and Jobs Act (TCJA) which was designed to incentivize the creation of new jobs.
The Governors cigarette tax hike proposal is a desperate move to grab at a dwindling revenue source.
Worse, he continues his attempts to price low and middle-income New Jerseyans out of their Second Amendment rights with fee hikes on gun ownership – with an increase to $48 in the handgun permit fee, and $95 for the firearms I.D. card fee.
Boat sales and limousine services would also see punitive tax increases.
While it is not included in his budget, Governor Murphy has indicated interest in a financial transactions tax proposal. This ill-advised concept would drive down the value of everyone’s investments, if the exchanges kept their trade processing in New Jersey. If they leave, New Jersey will have shot itself in the foot again, losing jobs, revenue, and relevance.
Despite everything, the state is fortunate to see revenues returning faster than expected, now $1.4 billion higher than Gov. Murphy stated in his budget address (Office of Legislative Services). It is always a bad idea to raise taxes, but to do so based on lowball revenue estimates as many households struggle with unemployment, and businesses close, would be outrageous and should result in political consequences.
On top of that, the legislature has approved tax hikes from Governor Murphy in previous years. Each year, coronavirus or not, Governor Murphy is pushing the same tax first, and ask questions later approach. New Jersey will lose out as more families and businesses leave or fail. No legislator should support more reckless tax hikes. It is time to say no.
Grover G. Norquist
Americans for Tax Reform