NJ Governor Phil Murphy Wanted to Increase Taxes by $1.2 Billion More than Massive Enacted Tax Hikes

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Posted by Dennis Hull, Doug Kellogg on Friday, October 29th, 2021, 2:38 PM PERMALINK

During his first term, New Jersey Governor Phil Murphy proposed over $4 billion in tax hikes, succeeding in increasing taxes by over $2.7 billion on New Jersey residents. That means he wanted more than $1.2 billion in tax hikes that were left on the table, that would have been another billion dollar-plus burden for Jersey families and businesses.

Even with full Democrat control of the legislature, Murphy’s tax hike wishlist was too much to achieve in three non-election years. That is cold comfort to New Jersey families and businesses who are left to wonder if Murphy will push for those tax hikes should he win a second term in office.

New Jersey businesses are already set to face new tax burdens to replenish the state’s unemployment fund. This, even though New Jersey has only spent a small fraction of the federal American Relief Plan money it has received – which could be used to refill the unemployment insurance fund.

Governor Murphy may sense his tax hiking agenda is not popular, as he recently stated, “I pledge to not raise taxes,” during the first gubernatorial debate. Yet, Murphy has failed to put that promise in writing, and recently chided Elon Musk for his criticism of high-tax blue states, saying being in a liberal state is worth the higher costs.

Meanwhile, Republican challenger Jack Ciattarelli has signed the Taxpayer Protection Pledge, publicly committing to Jersey voters that he will oppose all tax increases should he become governor.

Murphy’s tax hikes – and massive new debt – fueled a nearly 34% increase in the state budget in just four years. He took the budget up to $46.6 billion in 2021, from $34.7 billion, in the last year Gov. Christie was in office.

On top of the enacted tax hikes, Murphy’s debt plan is backed by an automatic property tax increase, should the state have any issuing paying the debt back. This threat of yet another tax hike looms over New Jersey families who already pay the highest effective property tax burden in the nation.

Here is the full slate of tax hikes that Governor Murphy has tried to impose on New Jerseyans, and whether they were enacted or not:

$2,778,000,000 – Total tax hikes enacted under Gov. Murphy:

  • $425 million Corporation Business Tax (CBT) hike – FY19
  • 9% to 11.5%
  • Surcharge on corporations earning over $1 million
  • Highest in the nation
  • $210 million: Corporation Business Tax (CBT) hike – FY21
  • Extended 2.5% tax hike through 2023
  • Originally intended to phase out starting in 2020
  • $436 million Corporate tax code "modernization” – FY19
  • Combined reporting, taxes profits moved out of state
  • $188 million Sales tax expansion – FY19
  • Taxes out-of-state Internet retailers for the first time
  • $100 million HMO premium tax hike – FY20
  • 2% to 3%
  • All residents with HMO health insurance
  • $263 million HMO premium tax hike – FY21
  • 3% to 5%
  • All residents with HMO health insurance
  • $280 million Wealth tax hike – FY19
  • 8.97% to 10.75%
  • All income above $5 million
  • $450 million “Millionaire’s Tax” hike – FY21
  • 8.97% to 10.75%
  • All income above $1 million
  • $4 million E-cigarette tax – FY19
  • 10 cents per milliliter of nicotine fluid
  • $15 million Airbnb tax hike – FY19
  • All online rental booking sites (Airbnb, VRBO, etc.)
  • Must collect 6.625% sales tax
  • Must also collect 5% hotel occupancy fee
  • $12 million Tax on ride-hailing apps – FY19
  • All ride-sharing services (Uber, Lyft, etc.)
  • 50-cent surcharge on solo rides
  • 25-cent surcharge on shared rides
  • $100 million Tax on carried interest – FY19
  • 17% tax on Wall Street hedge fund performance earnings
  • $295 million Average annualized cost for Unemployment Insurance tax hike – FY22
  • New 3-year $885 million tax on employers to replenish Unemployment Insurance Fund
  • 2021: $252 million
  • 2022: $296.6 million
  • 2023: $336.4 million

 

$1,229,000,000 – Proposed Murphy tax hikes (not enacted):

  • $581 million: Sales tax hike – FY19
  • 6.625% to 7%
  • $218 million: Cigarette tax hike – FY21
  • $2.70 to $4.35 per pack
  • $21.5 million: Opioid tax hike – FY20
  • Up to $5 million fee (read, tax) on pain medicine
  • $65 million: Tobacco tax hike & vape tax – FY19
  • 30% to 68% rate on tobacco products
  • New 75% rate on e-cigarette distributors and wholesalers
  • $8.5 million: Firearms fee hike – FY21 (third year in a row)
  • Firearm permit application: $2 to $50
  • Firearm ID card: $5 to $100
  • Carry permit: $20 to $400
  • Dozens of other fee increases
  • $13 million: Sales tax on limousine services – FY21
  • $7 million: Eliminate sales tax cap on boats – FY21
  • $315 million in additional millionaire’s tax – FY19
  • Murphy’s millionaire’s tax proposal would have taken $765 million from taxpayers, $315 million more per year than the version that ultimately passed.
  • Tax hike on Realty Transfer Fee on sales of high-end homes – FY19
  • 1% to 2%

Photo Credit: Flickr - Phil Murphy for Governor

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