The biggest debate over Gov. Phil Murphy’s proposed millionaire’s tax has been whether millionaires would be deterred from moving into New Jersey and whether those who are here would actually leave the state if the new proposal passes.
The decision is an individual one — based on a number of factors — so the question is impossible to answer on anything but a case-by-case basis.
But we can tell you how much more millionaires would pay if they continue to live here. And how much they would save if they moved to Pennsylvania, New York or even Massachusetts.
We checked in with the New Jersey Society of CPAs, and it sent us to Karen Artasanchez, a CPA and principal at Wilkin & Guttenplan P.C.
She compared the impact of the proposal on someone who is married with two kids and makes $2 million, $5 million or $20 million annually.
What she found is millionaires of all sizes — all of whom would save money if they moved under the current laws — would save even more money if they moved after any tax increase.
For the wealthiest, the additional savings for moving out of state is well over $300,000.
A look at the comparison:
All numbers are calculated as if Murphy’s proposal to raise the millionaire’s tax were implemented:
First, if you stay in state:
New Jersey vs. New Jersey
- Earn $2M: You will pay $17,533 more annually;
- Earn $5M: You will pay $70,933 more;
- Earn $20M: You will pay $337,933 more.
If you want to move:
New Jersey vs. Pennsylvania
- Earn $2M: You would save $117,145 if you lived in Pennsylvania, about $17K more than you would under the existing rules;
- Earn $5M: You would save $347,545, about $70K more;
- Earn $20M: You would save $1,499,545, about $340K more.
New Jersey vs. New York
- Earn $2M: You would save $42,781 if you lived in New York, about $17K more than you would under the existing rules;
- Earn $5M: You would save $61,637, about $52K more;
- Earn $20M: You would save $351,137, about $340K more.
New Jersey vs. Massachusetts
- Earn $2M: You would save $77,096 if you lived in Massachusetts, about $17K more than you would under the existing rules;
- Earn $5M: You would save $246,596, about $70K more;
- Earn $20M: You would save $1,094,096, about $250K more.
Artasanchez said the numbers are meaningful.
“It’s a lot of money,” she said. “I’m not going to sit there and say if someone is making $20 million, $300 grand isn’t substantial, because it is.”
Read more from ROI-NJ:
- Murphy: Millionaire’s tax impacts highest earners, corporate tax impacts middle-class families
- Murphy still all-in on millionaire’s tax and raising state sales tax
- Millionaire’s tax is big topic of discussion at budget hearings
- Youth is served: Krom, NJCPA president at 35, braces for accounting’s coming changes
