NJPP Unveils COVID-19 Tax Policy Do’s and Don’ts
TRENTON, NJ (March 18, 2020) – In response to the ongoing COVID-19 outbreak and the necessary closings and restrictions on New Jersey businesses, New Jersey Policy Perspective (NJPP) unveiled a list of tax and budget policy do’s and don’ts to help guide state lawmakers in their response to the pandemic.
“The COVID-19 pandemic is an enormous threat to New Jersey’s public health and economy,” said Brandon McKoy, President of New Jersey Policy Perspective (NJPP) and author of the policy brief. “In the coming days and weeks, state tax and budget policy can and must play a major role in shaping the state’s ultimate recovery. It is critical that New Jersey prioritizes the needs of families, children, and small businesses who will be harmed most by the pandemic and not those of ultra-wealthy individuals or big corporations.”
The policy brief, Tax Policy Do’s And Don’ts During a Health Crisis, centers on two principles: the state should expand safety net services and direct relief to those who need it most, and the state should raise new revenue to ensure it has the resources to adequately respond to the concurrent health and economic crises. By restoring the millionaires tax and estate tax, strengthening the inheritance tax, and extending the corporate business tax surcharge, New Jersey will have the revenue and flexibility to help fund social benefit programs and expand access to health coverage in these challenging times.
“New Jersey will require significant financial resources to adequately address the combined public health and economic crises from COVID-19,” McKoy added. “Without new revenue, the state will not be able to fund vital investments and assistance for struggling families, workers, and businesses throughout this crisis. The level of assistance from the federal government remains unclear and may not be enough to help the state fully. New Jersey must implement progressive tax policies — like the millionaires tax and estate tax — to quickly and effectively respond to COVID-19 and the looming recession.”
The brief also warns against cutting taxes, specifically the sales tax and payroll tax, as these policy decisions would starve New Jersey of much-needed revenue at a time when the state must expend resources to expand public health services and assistance. A sales tax cut or holiday would do little to encourage consumer spending, whereas a payroll tax cut is not well-targeted, moves too slowly, and would not provide meaningful or immediate relief to those who need it most.
New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.
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