NJ’s Richest Not Paying Fair Share For COVID Recovery, Groups Say – patch.com

MONTCLAIR, NJ — Progressive groups in New Jersey have been accusing the state’s wealthiest residents and corporations of skipping out on their fair share of the tax burden for years. But now there’s a new reason to take a look at a widening gap between the rich and poor, they say: the coronavirus.

Since the virus began to spread in New Jersey, many experts have been warning about the potential financial meltdown it may mean for the state. It’s a concern that was thrust into the spotlight again Wednesday, when the New Jersey Supreme Court upheld a plan to borrow up to $9.9 billion to fund recovery efforts.

While advocates say the funds are desperately needed among the state’s most vulnerable residents, eventually, the money will have to be repaid. And when that time comes, it’s only fair those with the deepest pockets chip in the most.

“Austerity measures are not the answer — not for recession, not to fund the recovery,” Sue Altman of the New Jersey Working Families Alliance said after the state’s borrowing plan was first approved in July.

“New Jersey’s recovery must be fair and benefit workers, residents and families, not just corporations and the already wealthy,” Altman said.

Justin Goldsman of Our Revolution Essex County said a state budget that “works for the people” is long overdue.

“Essex County isn’t just one of the hardest hit counties in the country when it comes to COVID-19, but it also epitomizes incredible levels of income and wealth inequality,” Goldsman said. “We must invest in the lives of every day residents of New Jersey, not in yacht sales, corporate tax deals and gimmicks.”

Here are three ways that the state could pick up the slack.

RAISE INCOME TAX FOR NJ’S RICHEST

One of the best ways to prevent a crushing financial fallout from the coronavirus crisis is also one of the most obvious, some experts say – tax the rich.

The long-running campaign to hike income taxes on the state’s wealthiest residents got a shot in the arm when Gov. Phil Murphy made a “millionaire’s tax” a central spoke in his campaign platform. That plan has seen staunch opposition from some critics in the Legislature, although it showed signs of life again in February.

But either way, advocates haven’t given up the fight for tax equality in the Garden State.

In June, nonprofit think tank New Jersey Policy Perspective (NJPP) released a report that claimed the state could raise more than $1.5 billion for COVID-19 recovery by raising the income tax on New Jersey’s wealthiest households.

The proposal called for the creation of new tax brackets at $250,000 and $1 million, and “slightly increasing” the tax rate at the existing $500,000 and $5 million brackets. People who earn less than $250,000 a year would be unaffected. (Read the full proposal here)

“State lawmakers can either balance the budget with deep cuts that will harm our communities, or they can make sure the wealthiest among us pay their fair share,” NJPP policy analyst Sheila Reynertson said.

The situation for many New Jersey residents was already grim before the coronavirus crisis. According to Renee Koubiadis of the Anti-Poverty Network of New Jersey, about 40 percent of the state’s low-wage workers were unable to afford all of their basic needs before COVID-19.

While many residents in the state have been depending on unemployment benefits to make ends meet, most of New Jersey’s wealthiest residents have actually increased their net worth, advocates say.

About six out of eight billionaires in New Jersey are better off now than before the pandemic began, according to Make the Road New Jersey.

‘ENDING CORPORATE TAX LOOPHOLES’

Small businesses may be struggling in the pandemic, but some of the largest aren’t just surviving – they’re thriving, activists say. This includes a company which has become familiar to many people trying to avoid setting foot inside a store over the past months: Amazon.

Last month, activists and Amazon workers rallied at the company’s facility in Elizabeth under the #Recovery4All banner, demanding that New Jersey fund the recovery effort by “ending corporate tax loopholes.”

“Amazon has done remarkably well during the COVID-19 outbreak,” activists claimed. “In the first quarter of 2020, the company reported $75.4 billion in revenue, a 26 percent increase from 2019’s first quarter. This is on par with what Amazon made in the fourth quarter of 2018 and only 14 percent less than its revenue in the fourth quarter of 2019. After a brief dip in March, Amazon’s stock prices have nearly doubled since then, reaching an all-time high of $3,182.63 in early July.”

Meanwhile, undocumented immigrants in New Jersey pay $600 million in state and local taxes and $1 billion in federal taxes and haven’t received a penny in government aid, activists said.

“Working immigrants like me pay more than our fair share in taxes and contribute to the economy,” said Roberto Sanchez, a member of Make the Road New Jersey. “But we have been completely left behind by government aid.”

“If we’re going to get our state back on track, New Jersey must invest in a recovery that includes all of us,” Sanchez said. “That means raising revenue by taxing corporations that continue to prosper.”

GOT YACHT? GOT TAXES.

Many of the tax breaks offered to New Jersey’s wealthiest families – including some approved during the tenure of former Gov. Chris Christie – are a slap in the face to the people who have been putting their lives at risk during the pandemic, advocates say.

In July, surrounded by luxury yachts at the Hudson Point Marina in Jersey City, dozens of frontline workers and their family members gathered to decry a Christie-era law that capped the sales tax on the purchase of yachts. The tax break costs the state $15 million every year in revenue, they said.

Doing something as simple as ending the yacht tax break could help to fund emergency benefits for thousands of undocumented immigrants, who have found themselves frozen out of aid programs in the coronavirus crisis.

“Immigrant families like mine that worked frontline jobs during the pandemic or lost their jobs have been completely left behind,” a Perth Amboy resident said.

“When we ask for aid, the state says there’s no funding,” she urged. “At the same time, billionaires are receiving tax breaks on their yachts. As a mother of two daughters, I’ve struggled to put food on the table and can’t make rent … New Jersey needs to get its priorities straight.”

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