As lawmakers close in on an imprudent plan to eliminate one of New Jersey’s best tools to fight concentrated wealth and inequality, a new report released this week shows income inequality remains at record levels in the Garden State. While New Jersey’s level of inequality dropped ever so slightly from 2007 to 2013, it remains higher than it’s been since the 1920s.
New Jersey is now the ninth most unequal state in the nation, with the top 1 percent earning 25.3 times more than the bottom 99 percent, according to the report, which was published by Economic Policy Institute for the Economic Analysis and Research Network, of which New Jersey Policy Perspective is a member. New Jersey was one of only 15 states where the top 1 percent took all income gains between 2009 and 2013.
“Income inequality in New Jersey remains at heights not seen since the 1920s,” said New Jersey Policy Perspective President Gordon MacInnes. “Those at the top have been doing quite well while the rest of us have been struggling the make ends meet or, worse, falling out of the middle class or even into poverty. Now is certainly not the time to exacerbate the problem by offering sweetheart tax breaks to a few wealthy heirs.”
Other key New Jersey findings:
- Between 2009 and 2013, New Jersey’s top 1 percent captured all income growth, while incomes for the bottom 99 percent actually shrank. That’s because the top 1 percent saw their incomes grow by 15.2 percent while the incomes of the bottom 99 percent fell by 1.4 percent.
- The average annual income of the top 1 percent is $1,153,293, which includes everyone in New Jersey who earns at least earn $547,737.
- The most unequal county in New Jersey is Essex. The top 1 percent there makes 44.8 times more than the bottom 99 percent.
To help stem the tide of rising inequality, New Jersey policymakers should:
- Preserve the estate tax, which is currently under serious threat, and other progressive taxes that are based on the ability to pay
- Boost working-class and poor families with smart policies, like increasing cash assistance benefits to deeply poor households under WorkFirst New Jersey, raising the minimum wage and expanding the Earned Income Tax Credit for working families
- Explore tax policies that will help change the fact that New Jersey’s lowest-income families pay the highest share of their incomes to state and local taxes, while the wealthiest pay the least