third time proving to be the charm for
new jersey governor phil murphy he's
always wanted a so-called millionaire's
tax to address some aggressive spending
plans he has for the garden state
this time he got it it's a doozy it will
take the top rate in that state to 10 at
three-quarters percent
from seven percent of those earning a
million are over are going to be paying
that here a lot of republicans say it
starts with them it's gonna spread to a
lot of other folks
having said that though there was much
more emphasis on the part of the new
jersey governor to hike taxes than there
was to cut spending
some relatively poultry cuts by
comparison and nothing to deal with the
state's
uh ballooning uh pension uh program that
seems to be out of wax right now and
public responsibilities that have
indebted the state at the rate it's
going for decades
to come heathers and moraga following
all of this zuma global president and
good read of the markets as well
you know heather he is maybe the first
and most prominent governor to propose
something like this from a blue state
he will not be the last they're all
looking at budgets that are under water
and deficits that are running away and
in about 44 of our states
they have to balance by the end of the
year this is his way of doing that what
do you think
that's right your taxes are going up
neil
look there are big budget shortfalls as
you mentioned because of covid across
the board
uh in new jersey for example the top
rate will go up to 10.75
and anyone making 5 million and up was
already paying that
but now over 1 million you would pay
10.75
percent on state taxes and what's
amazing is that
just across the river even a democratic
governor like
andrew cuomo knows that that may not be
a great idea as he was seeing a mass
exodus
from his state based on these increased
in taxes and new proposed increases
of millionaires tax for example to
states like north carolina
and florida you remember he said he
talked to his wealthy friends in upstate
new york he said i'll cook
come back we'll go out to eat i'll buy
you a drink remember that no it's coming
no one's coming but you know what's
interesting about it we know how what
this kind of thing when it happens
whether it's high taxes or just the
burden of living in a state where they
have all these financial problems
money moves as you've reminded me and i
you know later on i'm going to be
talking to the florida governors dealing
with a host of issues but
actually benefiting from people who are
trying to escape
high state taxes now increasingly
looking like new jersey
so that pattern will continue i suspect
well unfortunately it looks like it will
but i think there are some other
solutions for new jersey
for example instead of borrowing or
increasing taxes
they can look at their uh the money that
is put into pensions right now it's 4.9
billion you can take a few billion of
that
for now you repay that later on and i
think one of the biggest immediate
solutions would be
to change the tax code i'm assuming
people like yourself who are new jersey
residents
if you work in new york you're paying
new york state and city taxes right
but during the pandemic a lot of people
are working from home i think that trend
will continue
even post pandemic and so if you're
working from your home office in new
jersey
that tax money is rightfully uh
should go to new jersey some would argue
they're entitled to that and that would
be about
one billion dollars that they could
increase the revenue but
i just wonder about all of these states
that are facing this problem and now
they it's easy to raise access
i get if you're in a pinch all right
that's an option to consider when i
don't see the same
zeal uh applied to maybe addressing the
money that's going out the spending
that's going on or addressing these
unfunded pension obligations that are
over the top in new jersey i'm not
saying here and now
for firemen and policemen and teachers
we're trying right this moment
but grandfathered in the reluctance to
do that
is like a ticking time bomb that no tax
increase even at 100
could address no absolutely and that's
what the stalemate is in washington
right now and regardless of
what kind of compromise the two sides
come up with in terms of another round
of fiscal stimulus
it most likely seems plausible some
round to state and local governments
will be included whether that's
500 billion or 1 trillion dollars
they're going to bail out california new
york new jersey and a lot of
democrat a lot of republicans would
argue that they shouldn't be bailed out
because they couldn't manage
as you rightfully pointed out their
budgets uh they couldn't manage their
spending
before covet all right
heather thank you very very much and to
have this point does anyone remember the
alternative minimum tax it was meant to
ensnare very rich folks who were
avoiding paying taxes
uh but it has now grown to about
one-third of everyone today
who does pay taxes so it can it can
sprinkle down if you will to a lot more
people