Murphy 'confident' millionaires tax will pass

Democratic Gov.-elect Phil Murphy said Tuesday that he is “confident” his proposal to increase taxes on New Jersey’s millionaires will go through, even as Democratic leaders in the Legislature have cooled on the idea in light of GOP tax plans being considered in Congress.

Murphy said the state’s wealthiest residents would do “just fine” under the Republican proposals and argued that the rationale for a millionaires tax remains the same whether Congress overhauls the tax code or not.

“I think people are scared as heck when they look at this bill in Washington,” Murphy told reporters after a transition committee meeting in Trenton. “At the end of the day, it doesn’t change my calculus for what we should do in New Jersey, and I’m highly confident that’s where we’re going to end up.”

Related: New Jersey Democrats may reconsider 'millionaires tax,' Sweeney says

Murphy transition: Help wanted as team works behind the scenes during Thanksgiving week

Senate President Steve Sweeney, D-Gloucester, has long advocated for a millionaires tax and said the day after winning reelection on Nov. 7 that such a measure would be “the first bill we pass in January,” when Murphy takes office.

The common understanding is that such a bill would increase taxes on income over $1 million from a top rate of 8.97 percent to 10.75 percent. That could generate up to $600 million for the state, which Murphy wants to use to increase funding for New Jersey’s public schools.

More recently, however, Sweeney said he would reconsider his support if Congress passes and President Donald Trump signs legislation to reduce federal corporate and income taxes while repealing the federal deduction for state and local property, income and sales taxes.

"I don’t know what impact this Trump tax is going to have on us if it passes," Sweeney said. "I think we’re going to have to evaluate everything if it passes.”

Incoming Assembly Speaker Craig Coughlin, D-Middlesex, has also expressed hesitation about a millionaires tax despite supporting the idea in the past.

Jon Whiten, vice president of the left-leaning think tank New Jersey Policy Perspective, said Tuesday that any fears about a potential “double whammy” to wealthy residents if both the Republican tax plan and a millionaires tax go through are unfounded.

He said New Jersey families with incomes over $440,000 would get an average annual tax cut of $2,826 under the U.S. Senate’s latest tax proposal, while families earning under $110,000 would, on average, pay more in net taxes.

“The bottom line: New Jersey’s wealthy families aren’t being punished by the GOP tax plans — they’re being rewarded,” Whiten said in a statement.

Murphy on Tuesday said that economic growth in New Jersey must be fueled by a strong middle class, not by breaks for the state’s wealthiest residents.

“Everything we’ve talked about this entire campaign is to back the truck up and get back to reinvesting in the middle class and asking those, the biggest among us, the wealthiest among us, to pay their fair share,” he said.

He also rejected the argument, voiced most vocally by incumbent Republican Gov. Chris Christie, that raising the tax on millionaires will cause them to flee the state.

Asked if he bought that line of thinking, he responded simply: “I don’t.”

Email: pugliese@northjersey.com