Earlier today, NJPP Senior Policy Analyst Sheila Reynertson testified at the Assembly Budget Committee hearing in support of raising the income tax on individual earnings over $1 million. Highlights from her testimony are below. You can read her full remarks here.

SHEILA REYNERTSON, SENIOR POLICY ANALYST, NJPP 

On the need for new, sustainable revenue:

“New, sustainable sources of revenue like the millionaire’s tax allows property tax relief programs to keep up with the cost of living, offering meaningful support to seniors and those living on a fixed income. That in turn frees up resources to help New Jersey’s neediest families by increasing the Work First NJ grant for basic assistance again this year. Renewable sources of revenue help lawmakers wean themselves off risky budgetary practices — like using the state surplus as a slush fund — that have contributed to 11 credit downgrades. It frees up resources for universal representation to help keep New Jersey families together in this age of extreme xenophobia. It helps fund the Earned Income Tax Credit increase, one of the most effective anti-poverty tools and recently found to be even more cost effective than originally thought. And, of course, sustainable revenue allows New Jersey to continue making critically important investments in state assets that all families rely upon every day like NJ Transit and institutions of higher education.”

On the myth of millionaire tax flight: 

“Worry that wealthy taxpayers will flee New Jersey should be dismissed by peer-reviewed research findings, the vast majority of which show that raising the state income tax has a negligible effect on relocation decisions. The number of New Jersey taxpayers with incomes over $500,000 has consistently grown even as income tax rates on wealthy households have been increased twice. The share of these taxpayers grew an astonishing 450 percent, between 1994 and 2016, the most recent year for which data is publicly available. Millionaire tax flight is a myth, and that fact doesn’t go away when lawmakers hear anecdotal stories from estate planners.”

On rising income inequality:

“What should worry representatives is that the top 1 percent of earners in the Garden State, who earn an average $1,582,000 a year, make 24.3 times more than what the bottom 99 percent makes. This level of inequality ranks New Jersey as 9th worst in the nation.

“These high earners take home one fifth of all income made in the state. This is not far off from the state’s historical high, which peaked just before the Great Depression during the last Gilded Age. Yet today’s wealthy households in New Jersey pay a smaller share of their income in state and local taxes – 9.8 percent – than those in the middle 20 percent who, on average, earn $66,000 a year – 10.1 percent.”

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