Friday Facts and Figures is a brief digital newsletter focusing on data points from NJPP reports, research, and policy debates in New Jersey and beyond.
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COVID-19 Cases: 198,361 | Deaths: 14,266
[New Jersey Department of Health / COVID-19 Dashboard]
We did it! After more than a decade of advocacy by grassroots activists, anti-poverty advocates, and policy analysts — including all of your favorite wonks at NJPP — New Jersey is bringing back the millionaires tax! The change to the tax code, announced yesterday by Governor Murphy, Senate President Steve Sweeney, and Assembly Speaker Craig Coughlin, will create a new tax bracket for earnings over $1 million. This is a huge victory for tax fairness and will help fund New Jersey’s COVID-19 recovery. As NJPP President Brandon McKoy told The New York Times, “Calling on the state’s wealthiest residents to help fund New Jersey’s pandemic recovery is both smart and just policy, especially now during an economic downturn that has disproportionately harmed low-paid workers and communities of color.” Thank you all so much for helping us make this possible! [The New York Times / Tracey Tully]
Even with a millionaires tax, there is still much more work to be done to truly advance racial equity and economic justice in the tax code. One possible way to accomplish this: a micro-cent tax on high-speed financial transactions that are processed in New Jersey, including stocks, futures contracts, and derivatives. This would raise additional revenue from Wall Street and could tamp down excessive stock market speculation. As NJPP Senior Policy Analyst Sheila Reynertson explains here, the proposal would impose a $0.0025-per-transaction tax on persons or entities that process 10,000 or more financial transactions through electronic infrastructure located in the state. This could raise as much as $13 billion (!!!) a year, which could help the state meet its current and future obligations, pay off debt service, and fund expansions to the social safety net — and more. [NJPP / Sheila Reynertson]
Have any doubts that income inequality harms workers, their families, and the broader economy? A new study by the Rand Corporation finds that, if income had been distributed as evenly over the past five decades as it was in 1975, the median full-time worker in the U.S would earn about $92,000 a year. In reality, that worker earns just $50,000. Further, if per-capita GDP growth in the U.S. was evenly distributed over that time period — instead of going almost entirely to the top 1 percent — the bottom 90 percent of earners would collectively take home $2.5 trillion more in income each year. Bookmark this article for the next time someone tells you income inequality doesn’t matter. [New York Magazine / Eric Levitz]
Growing divides between the haves and have-nots are often stratified by race due to centuries of discriminatory state and federal policies, including many that are still on the books to this day. As it stands, undocumented immigrants and mixed status households are largely denied access to the safety net — even here in New Jersey — including many programs that they pay into. In this op-ed, NJPP Policy Analyst Vineeta Kapahi outlines concrete ways to lift low-paid working families out of poverty by expanding access to both pandemic relief (there are currently 686,000 immigrants in New Jersey who have been excluded from pandemic aid) and the Earned Income Tax Credit (EITC). Vineeta sums it up nicely here: “By taking steps to ensure support for New Jersey residents excluded from pandemic relief and addressing inequities in our tax code, state lawmakers can support families at the margins of poverty, challenge anti-immigrant bias and racism, and build a foundation for a stronger recovery from the COVID-19 pandemic.” [NJ Spotlight / Vineeta Kapahi]
Last year, state lawmakers expanded access to driver’s licenses to all New Jersey residents — regardless of their immigration status. This law is now under threat by new regulations proposed by the state Motor Vehicle Commission, which would impose unreasonable burdens on many driver’s license applicants. Specifically, the regulations would require applicants who do not have a Social Security Number (SSN) to provide either proof of an Individual Taxpayer Identification Number (ITIN) or a letter from the Social Security Administration (SSA) that indicates SSN ineligibility. The issue here is that many immigrants may not feel safe sharing their personal information with a federal administration that has a track record of hostility toward immigrants. Fortunately, there is another path forward, as the state could follow the lead of New York and simply accept an affidavit declaring that an SSN has not been issued to the applicant. [NJPP / Vineeta Kapahi]
Excited about the millionaires tax? Us too! If anyone tries to tell you the millionaires will move out of New Jersey, please send them this column in Forbes by economist Richard McGahey, where he breaks down how “millionaire tax flight” is a huge myth that is not reflected in any data. Not only does he cite a study from the last time New Jersey enacted a millionaires tax (spoiler: millionaires didn’t flee), but he also explains how wealthy individuals are rich in no small part due to states having strong infrastructure and an educated and diverse work force — things that aren’t possible without government investments and robust revenue streams to fund them. [Forbes / Richard McGahey]
Pets of NJPP
The pets are back! I’ve been trying not to show any pets twice, but I couldn’t resist sharing this picture of NJPP Research Director Nicole Rodriguez’s cat, Bernie, celebrating yesterday’s deal on the millionaires tax. Cheers! And as a disclaimer, please do not give alcohol to your pets.
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