With his pronouncements of support for a $1.3 billion tax increase, a $15 minimum wage, funding for Planned Parenthood, paid sick leave for everyone, and placing additional restrictions on firearms ownership, Democratic gubernatorial candidate Phil Murphy has made it clear, if elected, his will be a left-of-center administration, including increased spending and expanded regulatory authority.
He hasn’t quite arrived at Sen. Bernie Sanders’ campaign headquarters, but he’s cruising the neighborhood.
The bulk of the $1.3 billion tax increase proposed by Murphy would be shouldered by two of the culprits identified by Sanders repeatedly in his 2016 presidential campaign — the rich and large corporations.
Murphy would increase the state income tax for those earning over $1 million to raise $600 million and close a loophole that allows multistate businesses to avoid New Jersey’s higher corporate tax rate to produce another$290 million.
Garden State grass?
Most of the remainder would be realized by legalizing marijuana and imposing a state tax on it, a step that would, according to Murphy, generate $300 million.
With fellow Democrats retaining comfortable control of the Legislature, the income tax increase on the wealthy and the loophole closure on corporations will likely sail through. The millionaire’s tax, after all, has been approved by the Legislature a half-dozen times but vetoed by Gov. Chris Christie each time.
Prospects are equally bright for the minimum wage increase, although in all likelihood it will be phased in over a few years, while support for Planned Parenthood and paid sick leave are locks.
Legalization of marijuana is more problematic. While it’s an idea that has gained ground in recent years and shed much of the stigma associated with it, it remains an issue of concern for some who worry that state approval of a drug merely to generate revenue in a time of government need is questionable public policy. There is concern as well that marijuana use leads to harder and more dangerous drugs, a belief that an equal number of others argue is vastly overstated.
As governor, Murphy could muscle a legalization proposal through the Legislature should he decide to wield his considerable clout and exert his leverage.
Spending political capital
With major and far-reaching issues facing him, though — development of a new formula to fund local education and stabilizing the public employee pension system, to name just two — Murphy faces a choice: Spend his political capital on a marijuana legalization fight or concentrate on reaching a resolution of the education aid and pension problems.
Still, $300 million is $300 million, even though that estimate is open to challenge, and Murphy could decide that what is at stake fiscally is worth the risk.
He has pledged to sign into law all the gun control proposals vetoed by Christie, and it is more than likely the Democratic Legislature will give him the opportunity to do so.
One element of his package, however — a special tax of undetermined level on all gun purchases — is potentially more contentious, even with Democrats in control. Hunters and sportsmen remain a fairly potent political force and are certain to bring their opposition to the doors of the Legislature.
Murphy’s proposals, though, invite negotiation and compromise, and it may well turn out that he’ll abandon the tax on gun sales in return for approval of the remaining components of the package. He’ll be able to declare a victory in the fight against gun violence through stricter controls on ownership while, at the same time, avoid punishing weapons buyers with a tax.
His agenda veers sharply to the left, breaking cleanly with the Christie administration’s eight years in office and continues his strategy of hanging the governor’s record around the neck of Republican nominee Lt. Gov. Kim Guadagno.
‘Tax and spend’
Guadagno, not surprisingly, has seized on Murphy’s $1.3 billion tax increase proposal, characterizing it as typical Democratic “tax and spend” big government philosophy that no problem is too complex or too great that it cannot be solved by throwing more money at it.
Murphy is betting that taxpayers and voters will understand that aid to school districts and achieving solvency in the public pension system are matters of critical importance to the overall state’s economic health and that additional tax revenue is the only most effective solution.
He will argue, moreover, that by implementing the millionaire’s tax and closing the corporate loophole, middle-income wage earners will not be impacted adversely.
Murphy will repeat in some form or other the Sanders argument that the rich and big businesses have benefited disproportionately for years and evaded paying their fair share while middle- and lower-income families have fallen further and further behind.
There is, of course, nothing unique in a Democratic candidate calling for taxing the rich, but this year with Murphy holding a significant lead over Guadagno in both polling and fundraising, the possibility of actually extracting more money from the wealthy is virtually assured.
Murphy is channeling Sanders and hoping the fire the Vermont senator ignited last year still burns brightly enough to light the way to victory in November. He’s helped considerably, of course, by Guadagno’s association with Christie, the most disliked governor in modern state history.
He’s stopped short of calling for universal healthcare paid for by the government and for free college for all — two other Sanders campaign staples — but, hey, who knows?