TRENTON, N.J. – Gov. Phil Murphy’s third attempt to institute a millionaire’s tax won’t likely get legislative support as the state braces for significant drop-offs in the collection of taxes, said Assemblyman Hal Wirths.
“There aren’t as many millionaires now with the economic downturn,” said Wirths (R-Sussex). “And those who would have been in that bracket will realize they can maintain their wealth better in another state. For that reason, opposition to the millionaire’s tax should be stronger than it was the past two years.”
The stock market plummeted by more than 30 percent since Murphy claimed in February that there were 22,000 people living in New Jersey with incomes above a million dollars, and many of the state’s highest income taxpayers rely on those investments.
Taxes on high earners are notoriously volatile because of the heavy reliance on capital gains and other impermanent revenue streams.
Small business owners are also taking a hit, having to lay-off workers to stay afloat while business is in decline. Most small-business owners have pass-through businesses, meaning their taxes are paid through the income tax.
“If Murphy couldn’t muster the votes before because times were bad it just won’t be possible while businesses are closed due to the coronavirus outbreak,” said Wirths (R-Sussex). “Raising taxes is a fool’s errand now more than ever.”
State Treasurer Elizabeth Maher Muoio confirmed Monday that “precipitous declines” in revenues is expected and froze over to $920 million in discretionary spending.