The accord reached to provide emergency assistance benefits to prevent homelessness is indicative of the hypocrisy embedded in the ongoing quarrel between Gov. Phil Murphy and Senate President Steve Sweeney — a quarrel that sadly pits the homeless against the millionaires. Murphy’s desire that those at the top pay their fair share of taxes, while vetoing a bill that would have expanded emergency assistance to the homeless is the flip side of Sweeney co-sponsoring the bill to provide emergency assistance, while refusing to endorse a millionaire’s tax. The cruel irony is that in 2018, after declining for six consecutive years, the number of homeless people in New Jersey increased; at the same time, New Jersey ascended to the top rank nationally for the number of millionaire households living in a state.
In his budget address for fiscal year 2020, Murphy reiterated his call to the Legislature to raise the top-end tax rate for all households with an income above $1 million from 8.97 percent to 10.75 percent. Sweeney who during Chris Christie’s governorship five times voted in favor of a tax hike on the rich, switched sides last year and opposed a tax hike on millionaires. His refusal resulted in a compromise tax rate of 10.75 percent only on households with an income equal to or greater than $5 million. This year, the Senate President has been quoted as saying: “I’m not supporting it . . . I’m not raising the income tax.”
On the other hand, when Murphy vetoed bill S-1965 that would have expanded emergency assistance benefits to prevent homelessness, he angered Sweeney, the co-sponsor of the bill. Yet, in his FY2020 budget address, Murphy emphasized maintaining “our commitment to emergency aid for homeless residents,” while recognizing that “money alone is not an answer to this vexing problem.”
This past year, according to U.S Department of Housing and Urban Development Homeless Assessment Report, the number of homeless people in New Jersey climbed to 9,398. Only five states had a larger increase than New Jersey in 2018. The number of homeless individuals, homeless people in families and chronically homeless individuals all increased in 2018. New Jersey had the third largest increase in homeless people in families with children, nationwide.
NJ’s millionaire households have increased
In 2018, more millionaire households lived in New Jersey than in any other state in the nation. According to a recent report from Phoenix Marketing International, the number of millionaire households increased to 293,992.
Research using income-tax data published by the Economic Policy Institute found that in 2015 the 1 percent with the highest incomes in New Jersey accounted for 19.7 percent of aggregate state income. Their average annual income of $1.6 million was more than 24 times the average for the remaining 99 percent — about $65,000.
A clear majority of the state’s likely voters support raising taxes on the highest earners. An April 2018 public opinion poll commissioned by New Jersey Policy Perspective found that 70 percent of New Jersey adults support increasing state income taxes on households earning over $1 million. This poll was consistent with four prior polls conducted by a variety of polling agencies between September 2017 and March 2018.
An assessment of the fiscal year 2019 budget by New Jersey Policy Perspective showed that restricting the new tax bracket of 10.75 percent to households with earnings of $5 million and over eliminated approximately 31,000 households with incomes between $1 million and $5 million. Taxing these households would have created a more balanced tax structure and, thereby, narrowed income inequality.
While Murphy and Sweeney continue to squabble, the homeless population in New Jersey has risen and the rich garner a disproportionately large share of the state’s aggregate annual income. Homelessness and millionaires are inextricably bound together. The 2019 New Jersey housing profile, just published by the National Low Income Housing Coalition, shows that there is a shortage of 200,619 affordable and available rental homes for extremely low-income renters — no doubt, a consequence of the deep income inequality in New Jersey. Taxing the rich narrows income inequality, produces a fairer tax structure and reduces pressure on the housing market, while providing necessary resources to fund housing for the homeless.
The feud between New Jersey’s two senior politicians is an indictment of the tragic inequity entrenched in our society. It is time to establish a more just and equitable society in New Jersey. We can begin by reducing income inequality substantially and providing adequate housing to all in need. So, let’s tax all incomes at and above $1 million at rates even higher than 10.75 percent in FY2020 and use the proceeds to provide housing for the homeless.