Increased tax on millionaires, corporations is big part of Murphy’s budget

Gov. Phil Murphy made another plea for an increased tax on millionaires — and corporations — saying those who have prospered during the pandemic need to help those who have been hurt.

Murphy, during his budget address for the shortened fiscal year 2021, said it follows the ideal of everyone contributing their “fair share” to the recovery of the state.

Murphy has proposed a millionaire’s tax — which would increase the rate from 8.97% to 10.75% on gross income over $1 — not $5 million, as it currently stands. This is expected to bring in an additional $390 million.

Murphy also proposed keeping the corporate business tax surcharge at 2.5% (it was scheduled to go down to 1.5% for the next two tax years). This is expected to bring in $210 million.

There are additional taxes, including restoring the sales tax on limousines; removing the tax cap on boats; and applying a 5% surcharge to high-income individuals with federally Qualified Business Income who have benefited from a regressive new deduction for pass-through entities created under the 2017 federal Tax Cuts and Jobs Act.

“Building a stronger New Jersey requires us to ask those who, in some cases, continued to prosper as this pandemic raged around us — and most certainly were hurt less — to do more, so we can strengthen the middle-class families who are the backbone of our state,” he said.

“That means that the wealthiest among us — millionaires and large corporations — need to pay their fair share in taxes, whether it be on income or everything up to buying a yacht.”

Murphy said these taxes will enable the state to limit the pain being felt by the millions of middle-class families and the working poor. He said it will enable them to lift themselves out of poverty, and secure a better place for them through job training and workforce development

“Things that will make our economy stronger and benefit our business community for generations to come,” he said.

Murphy has tried to get such a millionaire’s tax through on two previous occasions, only to have it rebuffed by the Legislature. In his address Tuesday, he said he hopes the impact the pandemic has had on residents will make the Legislature reconsider.

“Let’s be honest about who this pandemic has hit the hardest — our middle class and low-income working families,” he said. “This tax would not impact them at all. But, through it, we can ensure that our recovery will lift them.”

He then made a personal appeal to the wealthy themselves.

“I would urge those who would pay this tax to see it this way: We are asking you to sacrifice pennies on your top dollar to ensure that every New Jerseyan has the same opportunity to succeed that you did,” he said. “You have the wherewithal that millions of families do not have at this extraordinary time in our shared history.

“And, we must recognize that too many families of color pay a greater share of their hard-earned income in taxes than millionaires, who are overwhelmingly not people of color.

“Ensuring fairness and justice in taxation is just as important as ensuring fairness and justice in society. In fact, I would argue it is an essential step in eliminating the structural racism in our society.”

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