Murphy's New Jersey's Budget Would Raise Taxes on Almost Everything

The NJ sales tax that was lowered after the new gas tax, will now be raised again according to Murphy's Budget plan. 
 (Bloomberg) -- New Jersey Governor Phil Murphy proposed taxing online-room booking, ride-sharing, marijuana, e-cigarettes and Internet transactions along with raising taxes on millionaires and retail sales to fund a record $37.4 billion budget that would boost spending on schools, pensions and mass transit.  The proposal, 4.2 percent higher than the current fiscal year’s, relies on a tax for the wealthiest that has yet to be approved and lacks support from key Democrats in the legislature. It also reverses pledges from Murphy’s predecessor, Republican Chris Christie, to lower taxes in a state where living costs are among the nation’s highest.


Murphy, a Democrat who replaced term-limited Christie on Jan. 16, said his goal is to give New Jerseyans more value for their tax dollars. He has promised additional spending on underfunded schools and transportation in a credit-battered state with an estimated $8.7 billion structural deficit for the fiscal year that starts July 1.

“If we enact another budget like the one our administration inherited, our middle class will continue to be the ones shouldering the burden, while seeing little in return,” Murphy said Tuesday in his budget address to lawmakers. “A millionaire’s tax is the right thing to do –- and now is the time to do it.”

Millionaire’s Tax
The budget counts on total revenue growth of 5.7 percent, the most since at least 2013, when it fell short. Murphy would increase the tax rate applied to income above $1 million to 10.75 percent from 8.97 percent, generating $765 million; and restore the state’s sales tax to 7 percent from 6.625 percent, raising $581 million. The state would gain $100 million by closing a carried-interest loophole on hedge-fund income.

“He must be kidding,” Senate Minority Leader Tom Kean Jr., a Republican from Westfield, said after the speech. “I don’t think anybody could have anticipated this level of tax increases.”

Murphy’s proposal would almost triple the direct state subsidy for New Jersey Transit, which has been plagued by safety and financial issues. Including funding for the agency from the state’s Turnpike Authority and an energy fund, he boosts money for New Jersey Transit by about a third.

His plan also includes a move to raise the state property-tax deduction to $15,000, which would benefit about one-third of homeowners, according to a budget summary. It also would create a child-care tax credit and increase the earned-income tax credit. Read more here