Can anyone tell me when working hard, creating jobs and achieving success became punishable offenses in New Jersey? The inexplicable obsession among the leadership in Trenton with raising taxes, more specifically the so-called “millionaire’s tax” seems to indicate just that.
With New Jersey at the top of nearly every tax category in the nation, any attempt to further increase taxes will only accelerate the exodus of residents fleeing the state for lower tax environments. Every person in New Jersey in one way or another will feel the damage done by raising taxes to fund an already bloated budget.
One of the best examples of the fallout from punishing success through taxation is the loss of former New Jersey resident David Tepper. Mr. Tepper had the unenviable distinction of paying the most personal income taxes in the state – over $125 million annually. In 2015, he moved to Florida, a state that has no income tax. In the blink of an eye, New Jersey lost $125 million in revenue, which in turn, created a huge hole in the state budget that those left behind had to fill.
In addition to tax revenue, New Jersey also lost Mr. Tepper’s enormous philanthropic giving, something I have witnessed firsthand. After Superstorm Sandy hit in 2012, Mr. Tepper came to Middletown and personally handed out 1,000, $100 Target gift cards to victims of the storm. Now, those in need lost a tremendous resource and other charities had a significant benefactor driven away.
An increase in the “millionaire’s tax” impacts not only wealthy individuals, but small businesses as well. Many small business owners file their business tax returns with their personal income taxes. Therefore, someone who owns two pizzerias and works 80 hours a week may fall within the parameters of a “millionaire” in the eyes of the New Jersey Treasury. Yet a move across the Delaware River could cut the tax bill by nearly two-thirds.
The moral of the story is this – wealth is mobile and wealthy individuals and small businesses do not have to sit idly by while the state treats them like fiscal piñatas. The proposed increase to the “millionaire’s tax” is an ill-conceived idea that will do serious harm to residents on every rung of the economic ladder and leave the rest of us having to shoulder an increased share in New Jersey’s financial burden. Perhaps turning the obsession for increasing taxes into an obsession for cutting spending would be a game-changing step in the right direction.
Assemblyman Gerry Scharfenberger, Ph.D.
Legislative District 13
225 Route 35, Suite 202
Red Bank, NJ 07701