Gov. Phil Murphy defended his call for a millionaire’s tax — saying its impact on the economy in the state would be far less than the raising of the corporate business tax that was included in a budget that passed the Legislature on Thursday, an effort led by Senate President Steve Sweeney and Assembly Speaker Craig Coughlin.
“My automatic impulse isn’t to tax people,” he said.
Murphy, in a call with ROI-NJ on Thursday afternoon to discuss the innovation economy, said a millionaire’s tax could result in the possible departure of a small number of families, while a business tax hike could result in the loss of jobs and commercial ratables if companies leave.
“A millionaire in New Jersey is more often than not going to be a Wall Street person or a financial services person,” he said. “That’s not entirely the case, but it’s the biggest bulk of them. I believe we can convince whoever they are to invest in the state, and they themselves will benefit. It’s not just that they are going to pay more, but they are going to get more. But even if I’m wrong and I fail in that pitch, when they move, they move as one family; that’s one house.”
But the corporate business tax would impact more people.
“I had a conversation with a corporation the other day, and they have over 2,000 employees in New Jersey,” he said. “We flirt with a corporate business tax at the levels that have been discussed in the Legislature, and that company decides to move out of New Jersey, that is over 2,000 people who are out of a job or will move. Not one of whom is a millionaire.
“Those are middle-class houses that don’t get lived in or jobs that are lost or restaurants that are not visited.”
Murphy has said growing the economy is his primary focus. And he has a response for those who say that you can’t raise taxes and grow the economy, or, as some critics have said, that his administration is talking out of both sides of its mouth.
“For folks who think I’m speaking out of both sides of my mouth, I would say look at Exhibit A, and that would be the state of California, which is the fifth-largest economy in the world, and that is Silicon Valley,” Murphy said. “And they should look at what millionaires pay to live, stay and work in California.”
And, he said, the millionaire’s tax is as much about what millionaires will get in return, as it is about how much they will be paying.
“I think we have a very credible value proposition,” he said. “We’re going to ask folks to pay their fair share, we’re going to be smart about closing loopholes that other states have long ago closed and hedge funds, etc., and we’re going to plow that back into public education, transportation, pre-K, access to higher education.
“New Jersey was never the low-cost state to live or do business. Even then, we were triple-A bond rated.”
Regaining a balance of the money spent from the money earned from taxpayers is the equation Murphy said he is focused on.
The business community, however, is equally concerned about the legislators’ proposed corporate business tax and what it means for them.
“It’s not that I’m trying to defend corporations that, by the way, were doing fine under (former Gov.) Chris Christie and are doing just fine under (President) Donald Trump,” he said. “The fact of the matter is, they are doing just fine under Trump in all 50 states. So, if we become the most expensive state in the nation, it’s not like their windfall was only in the state of New Jersey that they would lose if they moved somewhere.
“I am saying, ‘Heck, no,’ to anything that makes us demonstrably less competitive than other states.”