We asked McKoy: Define ‘fair share’? His response was outstanding

    Gov. Phil Murphy used that phrase again. The one that comes up whenever a politician has to explain how they are going to pay for their wish list of projects.

    “Fair share.”

    As in, if the rich would just pay their “fair share,” everything will balance out.

    We wanted to know just what that number was. So, we went to the experts on progressive politics and programs meant to address (and hopefully correct) social inequities: New Jersey Policy Perspective.

    NJPP President Brandon McKoy knew just what to say in a conversation with ROI-NJ on Tuesday afternoon. And, instead of trying to interpret or paraphrase him, we felt it best to let his words speak for themselves in a question-and-answer format. So, here goes:

    ROI-NJ: Murphy is looking to extend the millionaire’s tax to more people — and extend the surcharge on the Corporate Business Tax. This, a year after getting movement on both. So, we have to ask: Should this be implemented, will the wealthiest individuals and biggest companies finally be paying their ‘fair share’? Or will there be another request next year … and the year after?

    Brandon McKoy: It’s frustrating to hear that question, because it seems facetious. We know, in America, that wealth drives opportunity, it drives health, it drives security, etc. And we know, in America, the opportunity to develop wealth has been reserved for a select few because of explicit policies. The opportunity to get a home, the opportunity to get an education, the opportunity to take advantage of various programs like the GI Bill were closed to non-white Americans for a long time. So, the idea of, ‘Are we done?’ is crazy.

    Governor’s Office
    Gov. Phil Murphy delivers his fiscal 2021 budget address Tuesday.

    We’re done when non-white families don’t have to look at a wealth gap that shows them that white families on average have 10 times the wealth that they do. If folks are getting tired of hearing about this for a few years, imagine what families of color in New Jersey have been dealing with their entire life.

    So, I don’t want to hear about, ‘When are were going to be done?’ We’re done when people are whole. This budget makes a lot of steps toward this, but until we get at wealth disparity — which is separate from income — and the ways in which generational wealth has been passed down in a way that cements white supremacy and white privilege … until we do that, we will not be done.

    And, if the business community or anybody else wants to make a stink about it, they need to develop an honest proposal for dealing with that racial wealth gap — one that does not involve proven failures like tax cuts for already-wealthy corporations and families.

    ROI: Those are all fair points. But isn’t this also fair: People and companies have to have some idea of how much it’s going to cost to live here — this year and the future? Many would like to have a number — a tax rate — something they can budget around. Why can’t there be a number?

    BM: I appreciate what you’re saying, but here’s the issue: That number changes depending on the actions of others.  At the end of the day, the state is making decisions that have to make up for failures or successes by the federal government. So, when the federal government pulls back from a commitment to equity in tax code, the state needs to make up for that. When the federal government is successful at making the commitment to equity in the tax code, then the state might not need to make up as much.

    So, it’s not a static number. It is a moving number depending on the situation that we’re in. And, right now, we’re in the middle of a pandemic and a recession that is harming the hell out of communities of color and working families and is way less impactful on the rich and people who are secure. So, we’re going to push for these ideas. Absolutely.

    ROI: OK, then we’ll put it back on you. Instead of saying it should be different, tell me how it should be?

    BM: We already have. In fact, we gave two options just a few months back. We put out proposals saying what a fair restructuring of the income tax code should be. We had one version that only made changes above $1 million dollars in income because, politically, that seems to be where people are right now. But, we also included a version that made changes above $250,000. Because, if you’re making $250,000 or more, you’re in the top 5% in New Jersey.

    ROI: How did it work?

    BM: The goal is to get to a situation where we take into account income tax, property taxes, wealth taxes, etc. We no longer want to have a situation where the middle class is paying a bigger share of its income to pay local taxes than the wealthy are.

    Right now, somebody who makes $80,000 a year pays the same income tax rate as someone who makes a half a million (dollars). And somebody who makes a million (dollars) is paying the same rate as somebody who makes $4.5 million. That’s nuts, too.

    So, we added brackets. And we gradually increase the rates once you get above a million (dollars) to reflect disparities in income. That raises a little bit more revenue. It also brings into the conversation the ability to think about lowering tax rates on people at the lower end of the spectrum.

    File photo
    David Tepper, once the richest man in New Jersey, now a resident of Florida.

    ROI: How will this help? Most feel raising rates on the highest earners will chase more of them out of the state.

    BM: You know who flees New Jersey more than anybody else? People who make less than $50,000. People who are not able to make it here because we don’t invest in our assets and make it affordable. So, if we’re really concerned about economic equity and security — and we’re really concerned about people fleeing the New Jersey — let’s have a tax code that recognizes that 80% of folks are getting 15% of the income. We’ve got to deal with that if we want to have any chance of ensuring that the middle class and the working class are able to make ends meet in the state of New Jersey.

    ROI: Here’s another way to look at the numbers: total tax dollars paid. Instead of comparing different people by percentage of income, why not compare by amount paid? Paying 10% on $50,000 is a lot less than 10% on $500,000 or even $5 million. The wealthiest make a great majority of the money, but they also pay the great majority of taxes. How do you respond to that argument?

    BM: How much money are you keeping? That’s how I respond. That’s the number to look at. At the end of the day, it’s about economic security. So, somebody who’s making $50,000 and paying 10% is keeping $45,000. That’s not super-secure. Not destitute, but not super-secure. Now, you want to cry poor if you’re making $3 million? You pay $300,000 and you only have $2.7 million left in the pocket. Really.

    This is the problem. These are the questions I ask: Do you want a state where everybody can be successful? Do you want a state where your kids can get an education and your neighbors’ kids can get an education and they can grow to contribute to our economy? Do you want a state where, when people get sick, they don’t have to go bankrupt and end up having a foreclosed property in your neighborhood that’s going to create blight? Are we all in this together or not? Is this shared sacrifice or is it not?

    I keep hearing people talk about shared sacrifice. We’re in a pandemic. We’re in a recession. It’s time for making choices. And the fancy things and the fancy giveaways to the very rich are the last things we need to keep on the table when we still have kids who don’t have health care, we still have people who are selling the plasma so that they can pay for rent.

    So, yeah, I hear that argument all the time: ‘I’m paying more total money.’ But you’re making a hell of a lot more total money. It’s not even close.

    ROI: One more. Another theory goes like this: Most of the richest people in the state and the country did not start out that way. They are one generation away from being middle class or lower. They often are from underserved communities. They managed to pull themselves up — it’s what makes America so great. Why should they be punished — asked to pay more taxes — for doing what others could do but didn’t?

    BM: Here’s the question I’ll ask back on that: We’re asking the wealthiest to pay another 2 cents on their income. That’s not fair? That’s punishing them for their success? If they could get in a time machine and go back to when they were 20 years old, would they tell themselves, ‘You’re going to get taxed 2 cents more on the dollar. That’s not worth it, you should stay where you are’?

    File photo
    Then-President Barack Obama, right, with then-Gov. Chris Christie after Superstorm Sandy.

    Really, that’s the lesson that we’re giving to people. That extra tax payment is not worth doing all the incredible things they do now, not worth being as secure as you are. That’s such a nihilistic viewpoint to me, and I think it’s ridiculous.

    And, furthermore, there’s a couple of other things that need to be addressed. One is, the experience of immigrants to this country is very different than the experience of Black Americans. So, let’s not compare the situation and say it’s apples to apples.

    The ways in which immigrants have been able to get ahead in the country is very different than the ways in which Black Americans have been held back. Now, people of color, in general, face a ton of obstacles to success. But an immigrant success story has nothing to do with the challenges that Black Americans face. That’s a very unique situation that is born from a very unique history.

    Secondly, the idea that paying tax is a disincentive is crazy. First of all, as President (Barack) Obama used to say, ‘You didn’t build that.’ What were the resources that were available to you to help you get there? Did you pay for the roads that took you to get to where you had to go for your opportunities? Did you create the school that it took you to learn all the great things you learn to get that opportunity? No, you didn’t. This idea of a self-made person who lives in a vacuum and never received any help from anybody on the outside is ridiculous.

    ROI: I’ll give you the final word.

    BM: We want to see more people be able to come to New Jersey and grow their wealth. We want that, but that requires having reliable assets. I always remember one wealthy New Jerseyan who said: ‘You know what’s going to get me to leave New Jersey? If I can’t reliably take NJ Transit and get from my front doorstep to Midtown Manhattan in 45 minutes.’ That’s the point, right there.

    So, let’s make sure our assets are reliable. Make sure they are high quality and make sure that the taxes people pay to live here are worth it. That’s being fair.

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