TRENTON – Before his Democratic colleagues approved his bill, Assemblyman John McKeon (D-27) defended the re-implementation of the millionaire’s tax, which is running parallel to the Democrats’ budget proposal. The committee voted 8-4 along party lines to approve the measure.
As Assemblyman Lou Greenwald (D-6) said, the surtax on income above $1 million is “bootstrapped” to a school funding bill that appropriates $500 million to suburban school districts. The surtax bill also includes roughly $60 million in tax cuts for low-income pension recipients and retirees.
Saying that the bill already reveals his answer, Assemblyman Jay Webber (R-26) asked McKeon, “Do you think that New Jerseyans are overtaxed?”
Having been a mayor, McKeon said he knows that people want services, but not taxes.
“They all see themselves as being overtaxed,” McKeon said. “I don’t think anyone likes paying taxes…You need revenue to do stuff.”
He supports “not taxing a dollar or any more than it takes” to provide services, which is the defense he used when asked why the surtax sunsets in two years.
“If it’s good policy, why sunset it?” asked Declan O’Scanlon (D-12).
McKeon said, “As I said before, we don’t ever want to overtax.” The sunset provides for a review period to see if the tax is still necessary, he said, “in order to provide suburban school tax relief.”
Webber said, “When this doesn’t raise enough revenue and we’re a year or two years down the line, what other taxes would you consider?…You’d be open to a gas tax increase?” Greenwald intervened as chairman and asked for the discussion to stay on the bill.
David Brogan, N.J. Business & Industry Association vice president of Taxation & Economic Development, said the group opposes the surtax for several reasons. It makes the state less competitive for businesses, he said, especially compared to the lower taxation levels of surrounding states.
“We also believe this is a tax on small business and entrepreneurs,” Brogan said. “It really discourages investment, reinvestment and hiring.”
Assemblyman Albert Coutinho (D-29) asked the special interests to stop perpetuating the “fallacy” that the surtax will hurt small business. “I, as a small business owner,” he said, “I would love to pay this tax,” but it’s really meant for “financiers on Wall Street and boutique lawyers.”
N.J. Chamber of Commerce’s Michael Egenton agreed with Brogan. “We see (millionaires) as job creators and job providers.”
As a side note, Egenton said, “You’re going to see, probably, a big change in their (contributions to) philanthropic organizations.”
“We stand opposed to it,” he said.
For people “who just benefited from the Bush tax cuts,” Greenwald said of the millionaires, “Until the system is fixed, we have nowhere else to go with this.”
“Perhaps the supporters of this bill should take note of the opposition,” Webber said, “people who they claimed were supporters of the bill (in its former incarnation).”