NJ Needs To Keep Its ‘Corporate Millionaire’s Tax,’ Activists Urge

NEW JERSEY — Preschool for 37,000 kids. Nearly 5,000 affordable housing units. An estimated 1,500 electric school buses. Doubling the state’s college tuition assistance. These are some of the things that New Jersey could pay for if it extends a “corporate millionaire’s tax” for some of its largest businesses, advocates say.

On Friday, members of the For The Many New Jersey coalition sent a letter to Gov. Phil Murphy, Senate President Nicholas Scutari, Assembly Speaker Craig Coughlin and members of the Senate and Assembly Budget Committees. Their demand? Keep the juice running on the state’s corporate business tax surcharge.

The surcharge is a 2.5 percent tax on corporate profits exceeding $1 million, which is paid in addition to the state’s 9 percent overall rate – making the combined rate of 11.5 percent the highest in the nation for 2022. It was rolled out in 2018, the year after Murphy was first elected.

The surcharge tax was originally scheduled for step downs in 2020 and 2021. But instead, it was extended by the state Legislature in 2020. It won't sunset until Jan. 1, 2024.

Pledging that there will be “absolutely no new taxes” as part of the upcoming budget season, Murphy said that he is open to letting the surcharge expire at the end of the calendar year in an interview with Bloomberg TV earlier this month.

The interview took place in the wake of the governor’s latest state-of-the-state speech – during which he slammed other U.S. states for giving “huge tax breaks to the wealthiest and most powerful” by raiding schools and community programs.

• See related: NJ Advocates Worry That Huge Corporate Tax Cuts May Be Around The Bend
• See related: NJ Corporate Tax Break Controversy: What Changed, And What Didn't

It isn’t small businesses that are paying the extra taxes, advocates have pointed out.

The surcharge – which is estimated to bring the state at least $600 million annually – is coming out of the pockets of the top 2 percent of the wealthiest companies operating in the state, including multi-state corporations like Amazon and Walmart that make profits in New Jersey, but are not headquartered here. And giving it up would be a slap in the face to anyone who is struggling to put food on the table and keep the lights on, activists say.

“This is exactly the wrong time to be giving the most profitable corporations a $600 million tax cut,” their letter states.

“The wealthiest 2 percent of businesses should be paying more, not getting a tax cut when everyday New Jerseyans are struggling,” the letter continues. “We keep hearing about kitchen-table issues and middle-class New Jerseyans. How will corporate tax cuts help them?”

The letter, which can be seen here, was signed by 28 organizations and labor unions, including: ACLU of New Jersey, 32BJ SEIU, BlueWaveNJ, Clean Water Action, CWA District 1, Environment New Jersey, Healthy Schools Now NJ, Housing and Community Development Network of NJ, Jersey Renews Coalition, Latino Action Network, League of Women Voters of New Jersey, Lutherans Engaging in Advocacy NJ, Make the Road New Jersey, New Jersey Alliance for Immigrant Justice, New Jersey Citizen Action, New Jersey Education Association, New Jersey Institute for Social Justice, New Jersey Policy Perspective, NJ 11th For Change, NJ Work Environment Council, NJWFP, Our Children/Our Schools, Our Revolution New Jersey, Save Our Schools NJ, State Revenue Alliance, Unidad Latina en Acción NJ, Voters of Tomorrow New Jersey, Wind of the Spirit Immigrant Resource Center.

Other New Jersey officials and pundits have argued in favor of dropping the state’s corporate tax surcharge, however.

Some Republicans, such as Assemblyman Christopher DePhillips (District 40), have been blasting New Jersey’s “highest-in-the-nation” corporate tax rate, with DePhillips recently pushing for a bill that would lower the rate to an overall 2.5 percent.

“The business community knows that Democrats in Trenton are addicted to taxing and spending,” DePhillips said. “Democrats cemented their bad business reputation when they passed the additional 2.5 percent corporate surcharge in 2018 and then added insult to injury by extending it in 2020.”

CORPORATE PROFIT IN NEW JERSEY

According to a recent report from financial technology company Tipalti, there are three companies in New Jersey that will each make more profit in an hour than the average American will earn in their entire lifetime: Verizon (Basking Ridge), Johnson & Johnson (New Brunswick) and Merck (Rahway). See Related: These NJ Companies Make More In An Hour Than You Earn In A Lifetime: Study

In 2020, a scathing report said that while many people have been struggling to put food on the table and keep the lights on amid the coronavirus pandemic, some of New Jersey’s largest companies and richest residents were making big bucks.

Companies included in the report included Amazon and Walmart, which both have locations throughout the state. The report also named Freedom Mortgage, which is based in Mount Laurel, NRG Energy, which has a headquarters in Princeton, PSE&G, which has a headquarters in Newark, and American Water Works and the Campbell Soup Company, which are both headquartered in Camden. See related: 'Pandemic Profiteers': Report Blasts NJ Companies, Billionaires

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