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TRENTON – Just whose side are Democratic leaders in the Legislature on?
That was one of the provocative questions Monday morning when a number of liberal groups rallied outside the Statehouse in support of raising income taxes on millionaires.
The governor supports a millionaires' tax and polls show a majority of voters do as well. Public support is no real surprise. It’s human nature to support taxing other people and most people, of course, do not earn a million dollars a year.
Gov. Phil Murphy speaks of “tax fairness” when he talks about increasing the rate on those earning a million dollars a year from the current 8.97 percent to 10.75 percent. There’s also the not so insignificant fact that a higher tax would raise close to $500 million.
That was on the mind of Jeff Tittel, who heads New Jersey’s Sierra Club. He said more revenue may stop cuts to the Department of Environmental Protection budget. He said that in New Jersey, a millionaires’ tax “is an environmental issue.”
Senate President Stephen Sweeney and Assembly Speaker Craig Coughlin oppose the tax.
Here’s where the politics gets interesting. Back when Republican Chris Christie was governor, the Legislature with Sweeney still leading the Senate passed a millionaires’ tax only to see the governor veto it. So why would Sweeney and other Democrats not support it now?
Could it be that years back Sweeney and others were pandering to the more left wing faction of the party? He’d support the tax to please the left knowing that Christie would veto it.
Now that the governor represents the more liberal wing of the Democratic party, Sweeney can no longer have it both ways.
Sweeney at times has said the so-called Trump tax cuts are influencing his thinking. His point is that limiting the federal deduction for state and local taxes to $10,000 can greatly impact the wealthy who are prone to live in lavish homes and this being New Jersey, pay much more than $10,000 a year in property taxes alone. It’s a plausible argument, although worrying about multi-millionaires is not normally a Democratic concern.
And as was pointed out Monday, the federal tax changes, which reduced tax rates, can benefit the wealthy as well.
There was a bad omen for the gathering, light rain and chilly temperatures for June. But led by an energetic Sue Altman, the head of New Jersey Working Families, about a half dozen speakers talked about the need to increase taxes on millionaires and more importantly, perhaps, to hold Democratic legislators accountable. A letter in support of the tax was signed by more than 100 groups.
But the organizers promised their campaign would be far more active than writing a letter. They said they wanted an “up or down” vote in the Legislature on a bill to raise taxes on millionaires and that they would “escalate” their efforts in the coming weeks.
That sounds like fun, but when you put aside the rhetoric, you can see a compromise coming. Recall that Murphy wanted a millionaires’ tax last year as well and the compromise raised taxes only on those earning more than $5 million a year.
So, how about lowering that threshold to $3 million?