Following Other States’ Progress on Economic Justice

New Jersey's leaders should make tax structure fairer, boost wages and more.

Published on Nov 18, 2016 in Economic Justice, Tax and Budget

This op-ed appeared in the November 16, 2016 edition of the Star-Ledger.

The new federal agenda that will be brought on by Tuesday’s stunning presidential and Congressional election results promises many dark clouds and tough challenges in the fight for economic justice. The threats to working families are grave, and the will to fend off these threats must be strong and sustained.

But a number of important wins on Tuesday in states and cities across the country show the way forward for New Jerseyans seeking a more just and fair economy, with more opportunity and a broadly-shared prosperity. Voters made their state tax systems fairer while raising revenue to fund shared priorities like schools and health care. They voted to raise the wages of millions of low-paid working people. They raised new revenue to fund critical investments in mass transit. And they approved efforts to make drug policy more rational while raising money to reinvest in communities by legalizing, regulating and taxing marijuana.

Tax Fairness

Californians voted overwhelmingly to extend the state’s 2012 income tax increases on the state’s wealthiest taxpayers for 12 years. The tax increase extension, on incomes over $250,000, will raise between $4 billion and $9 billion in revenue a year to pay for schools, health care, rebuilding the state’s reserves and paying down debt.

And closer to home, Mainers appear to have narrowly approved an increase in the state’s income tax rate on the state’s wealthiest households. The measure raises Maine’s top marginal tax rate (on income over $200,000) to 10.15 percent from 7.15 percent, and is projected to raise $157 million to pay for K-12 public education.

These changes mean that California will retain the nation’s highest top marginal state income tax rate, at 13.3 percent, and Maine will take over the second-highest spot. New Jersey’s top rate of 8.97 percent will now be the sixth highest, after those two states plus Oregon, Minnesota and Iowa. Meanwhile, our state policymakers allowed the Garden State’s 2009 surcharge on the wealthiest taxpayers to expire, costing the state between $4 billion and $7 billion in lost revenue in the past seven years.

But merely rehashing the income tax surcharge of past years is not the best path forward for New Jersey. Instead, lawmakers and gubernatorial candidates ought to look closely at California’s 2012 tax changes, which added new income tax brackets and raised rates progressively as incomes increased. Loosely emulating the Golden State’s model could raise well over $1 billion a year to invest in schools and property tax relief, while only raising taxes for the wealthiest 5 percent of households.

Lifting Wages for Low-Paid Workers

Voters in Arizona, Colorado and Maine approved gradually raising their state minimum wages to $12, and voters in Washington State approved an eventual $13.50 minimum wage. What’s more, voters in Flagstaff, Arizona, approved a phased-in $15 minimum wage. Even better, the ballot questions in Arizona and Washington also expanded earned sick days for those states’ workers – and the Maine and Flagstaff measures will also eventually eliminate the subminimum wage for tipped workers. Taken together, these increases will deliver raises for 2.3 million low-paid workers and inject more than $3.5 billion into local economies, according to the National Employment Law Center.

Meanwhile, low-paid workers in New Jersey – who face one of the highest costs of living in the nation – face a minimum wage that is about half of what it takes just to survive and are forced to rely on private charity and public safety net programs just to put food on the table, a roof over their heads and clothes on their back. Our governor spurned a commonsense attempt to raise the minimum wage to $15 by 2021, which would have boosted the pay of one in four New Jersey workers. But the leaders who stand up for working men and women must not give up their fight for fairer pay. This includes not only fighting for a more livable wage, but eliminating the two-tier system for workers who rely on tips and allowing all New Jersey workers to take time off when they are ill, without losing a day’s pay or – worse – their job.

Turning from the 2016 Elections to the 2017 Elections

As we emerge from the 2016 elections, we have to fight vigorously to protect the progress we’ve all made at the federal level, but we also must turn our attention to the most fertile ground for the progressive future we all want to see for New Jersey: the State House.

Next year New Jersey will elect a new governor, and every legislative seat is up for grabs. The Garden State has an opportunity to build a bulwark against short-sighted and punitive federal policies and to demonstrate the economic power of a more sensible, inclusive vision for the future. Let’s not waste it.

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