Some want to raise them. Some want to lower them. But whatever side you take, there’s one surefire way to start an argument in New Jersey: bring up taxes.
Earlier this spring, Gov. Mikie Sherrill released her first state budget proposal – and it was a doozy.
According to Sherrill, the state is looking at an estimated $3 billion structural deficit, one of the worst budget gaps in the nation.
New Jersey State Treasurer Aaron Binder has blamed the financial crunch on increased costs for health care, school funding, employee benefits and direct property tax relief. Binder also pointed to pension payments and debt service as major factors, and said that federal spending cuts scheduled to start in 2027 are adding to the problem.
Sherrill has outlined a two-pronged approach to attacking the budget gap: making spending cuts, and bringing in more cash.
The governor has insisted that her administration is not planning to raise taxes on low and middle-class New Jerseyans. Instead, the state will be looking to its wealthiest residents and businesses to chip in.
Sherrill’s proposals come as many conservative pundits demand that lawmakers lower the state’s 11.5 percent corporate business tax, which ranks as one of the highest in the nation.
New Jersey’s state fiscal year budget is due by July 1 each year, and a budget showdown is coming up fast. With that in mind, here are three recent proposals involving taxes that have been pitched in the Garden State:
‘SUPER-MILLIONAIRE TAX’
Two bills were recently introduced in Trenton that could raise more money for the state: a tax hike for “super-millionaires,” and the closure of a major corporate tax loophole.
Here’s what they would do:
According to the For The Many coalition, the bills could raise a combined $2 billion every year – enough to put a big dent in the state’s budget gap.
“These bills recognize that affordability and tax fairness go hand in hand,” said Eric Benson, For the Many Coalition Manager.
“New Jerseyans shouldn't foot the bill for an economy that works only for multinational corporations and ultra-wealthy households — while our communities are asked to do more with less,” Benson said.
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GOP LAWMAKERS PUSH FOR LOWER TAXES
Other advocates and lawmakers in New Jersey have taken the opposite stance, demanding that the governor’s office abstain from raising taxes on any person or business – wealthy or otherwise.
Among them is the New Jersey Republican leadership, which has been pushing the governor to prioritize cuts over raising taxes.
“We hope the governor remains true to her commitment to prioritize spending discipline over tax increases,” Senate GOP leader Anthony Bucco recently said. “If that is achieved it will mark a genuine change to the past eight years of failed policies under a Democrat-controlled legislature.”
Some GOP leaders such as Assemblyman Christopher DePhillips have called for New Jersey to loosen up its “worst-in-the-nation” 11.5 percent corporate business tax. DePhillips has also opposed the additional 2.5 percent corporate transit fee charged to businesses earning over $1 million.
“Businesses that stay in New Jersey have to cut costs somewhere and unfortunately that is translating to job loss, because that is what they can control,” he said. “The unemployment rate indicates that New Jersey is moving in the wrong direction and the only way to correct course is to cut taxes.”
Business organizations are also raising concerns regarding Sherrill’s proposed $60.7 billion spending plan, which could raise costs for employers with fees and tax changes.
Other GOP leaders have pushed for more income tax relief for individual households.
Bucco recently introduced a bill that would automatically adjust income thresholds for each tax bracket every year based on the rate of inflation, preventing taxpayers from being pushed into a higher tax bracket solely because of cost-of-living adjustments.
“This legislation has stalled in Trenton for far too long while families are effectively penalized for receiving modest income gains intended simply to keep pace with inflation,” Bucco said. “Indexing our tax brackets is a long overdue, commonsense step to help New Jersey families keep more of their hard-earned paychecks.”
In the video below, New Jersey Republican leaders respond to Gov. Mikie Sherrill's first budget proposal on March 10, 2026
‘A TAX SHELTER FOR MILLIONAIRES’
A new report from New Jersey Policy Perspective claims that a state tax deduction meant to help small business owners has grown into a $190 million “giveaway” – which overwhelmingly benefits New Jersey’s wealthiest households.
Here’s the problem, the group explained:
“The Alternative Business Calculation (ABC) allows filers with certain types of business income to use losses in one business category to offset income in another, reducing their personal income tax bill. Introduced in 2011 to address a narrow gap in the tax code, the deduction has more than doubled in cost over the past decade, and its benefits have become heavily concentrated among the wealthy. More than 60 percent of the deduction’s benefits flow to fewer than 0.6 percent of New Jersey tax filers, all with incomes above $1 million. Meanwhile, filers with incomes above $2.5 million now claim more in ABC benefits than all filers with incomes below $500,000 combined.”
The report, “Not As Easy As ABC,” finds that reforming the deduction could recover more than $120 million in revenue without affecting tax returns for 99 percent of New Jersey households.
“This deduction was never designed to be a tax shelter for millionaires, but that’s exactly what it has become,” said Peter Chen, senior policy analyst at New Jersey Policy Perspective.
“The state is facing a dangerous structural deficit, and this is $120 million we can recover without asking anything of the vast majority of New Jersey families,” Chen said.
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