Despite New Jersey raising taxes on millionaires in a budget deal reached last month, Governor Phil Murphy (D) says the number of millionaires in the states has been growing over the last few years - and has flatly rejected that increasing their taxes is causing a migration out of the Garden State.
Murphy justified the state's highest property taxes in the nation - telling Bloomberg TV "You get what you pay for in New Jersey."
New Jersey is the "quintessential middle-class state, and asking the wealthiest among us to help us make those investments is good for the middle class," added Murphy.
"If you’ve got kids who are school age, if you’re working, if you care about health care -- we have the No. 1 health-care system in America -- quality of life, location, if you care about talent for your business, there’s no better state in America," he said.
Murphy suggested that the millionaire's tax included in the budget he signed on September 21 provides "much-needed tax fairness."
The tax is expected to bring in an annual $390 million by raising the income-tax rate on those earning at least $1 million per year from 8.97% to 10.75%, and will apply to 16,491 residents and 19,128 filers who live elsewhere, per the US Treasury Department.
Those making above $5 million per year - 1,957 people who live in the state, were already subject to the 10.75% rate which was enacted in 2018. Corporate income over $1 million will also receive a 2.5% surcharge.
One ultra-wealthy individual who doesn't seem to mind paying more tax is 63-year-old billionaire David Tepper, who moved back to New Jersey in January after marrying a longtime resident - a move which may cost him $120 million in state income taxes this year. Before he left in 2015 he was the state's largest taxpayer.
New Jersey Senate President Steve Sweeney disclosed the move last week in a floor debate over the state’s so-called millionaires tax.
During the debate, Senator Joe Pennacchio, a Republican, used Tepper as an example of someone who had fled New Jersey because of high taxes.
“He moved back to New Jersey,” replied Sweeney, a Democrat overseeing the voting session. “He called me and told me. He says, ‘You got an extra $120 million coming from me.’” -Bloomberg
Tepper has an estimated net worth of $12.6 billion, according to the Bloomberg Billionaires Index. In 2015, the hedge fund manager moved to Miami, Florida. The following year, he moved his outfit, Appaloosa Management, to the Sunshine State as well.