Gov. Phil Murphy seems to have his heart set on taxing New Jersey’s highest earners as part of the “tax fairness” component of his progressive agenda.
But the plan can’t seem to gain traction among the other top Democrats in the legislature, who warn that such a tax will only drive millionaires away from the state. That’s not strictly a New Jersey concern; New York Gov. Andrew Cuomo has warned of the same thing in his state.
Now one of New Jersey’s top budget watchdogs is weighing in on the matter, warning Murphy to back off the plan.
Senate Budget Chair Paul Sarlo, also a Democrat, warned that a millionaires’ tax is too volatile a source of revenue, according to a report by NJBiz.com. During a downturn, the state has no assurance that top earners will not be among those unemployed, which has happened in the past, legislators warned, according to the report.
Though he did not coming out completely opposed to the tax, Sarlo said the state should be seeking to implement cost saving measures, such as the merger of the state worker and school employee health care plans—a measure pushed by Senate President Steve Sweeney.
Quote of the Day: “Let’s explore every opportunity, every avenue to find cost-saving measures, especially in the area of health care, that will negate the need for the millionaires’ tax. I don’t think anybody disagrees that there is going to be some type of recession in the future, a slight recession. Is the millionaires’ tax really a sustainable revenue, if you were to hit a slight [or] moderate recession?” — State Senator Paul Sarlo.
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