D’Agostino: Murphy’s “millionaire tax” would hurt the middle class

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After hopping out on stage like Roger Rabbit in mere celebratory fashion, newly-elected New Jersey Governor Phil Murphy addressed his supporters with seemingly powerful, Obama-like hand gestures and clearly rehearsed rhetoric. After excessively bashing the Trump administration, one line of the speech stood out to me: “Let’s make New Jersey, once again, the place where people come to dream big.”

Dreaming is nice, however, it seems that is the final destination for New Jerseyans. Murphy’s tax plan will be funded mostly by the millionaires in New Jersey. Murphy plans to invoke what is known as the “millionaire’s tax,” which was vetoed five times by Governor Chris Christie. The marginal income tax rate of those making $1 million and above jump from 8.97 percent to 10.75 percent, according to Christian Hetrick of Observer. Why is Murphy doing this? Well, because millionaires are rich, they have enough money, so what is so bad about taking some and sharing the wealth with the government?

Unfortunately for Murphy, his plan is based on the premise of “You earn more, I take more.” Not only can this be economically disastrous, – which I will later get to – but it is morally corrupt. Forcibly taking something from someone simply because they have more is the textbook explication of theft. Now, let me make this clear: Not all taxation is theft. Of course the government is going to need to tax its people to sustain necessary functions of government. However, when it comes to holding a gun to someone’s head and saying, “Give me more or else,” the fine line between taxation and theft is drawn.

Economically, New Jersey is in some deep manure, for lack of a better term. At first glance, perhaps it seems reasonably acceptable. Take their money and use it to fund government functions such as public education, transportation, public works, etc.. However, not everybody in New Jersey works under the government. Private industry is the basis of innovation and employment in all capitalist societies. With Murphy hiking up the marginal income tax-rate on top earners, he is giving a huge blow to the middle-class. Millionaires do not become millionaires overnight (unless your name is Donald J. Trump, however, I digress). Joseph Colalillo, CEO of Wakefern Food Corporation, employs approximately 35,000 people in NJ, according to New Jersey’s government business page. As Roseanne Harper reports, Wakefern Food raked in $13.6 billion in retail sales in 2013. Evidently, Colalillo’s company is providing satisfactory customer service through innovation and a large number of employees interacting with customers. Colalillo, a leader in New Jersey’s private industry, will take a hit when Murphy’s tax plan takes action. Colalillo will have to endure the struggle of lessening innovation to keep up with employers, or lay off middle-class workers. How helpful to the middle-class, right?

Discouraging top earners simply because they are top earners is an asinine ideology. Leaving top earners with enough capital to expand their business encourages maximum employment, company competitiveness, innovation and a thriving economy. Sturdier bridges and updated busses are worthless if middle-class workers can not afford to put food on the table because their income was given to the state government. If Phil Murphy really wants to make New Jersey the place where people come to dream big, he should consider allowing those dreams to come true.

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