Fair tax policy depends on prioritizing the well-being of all households, not just the wealthiest. New Jersey, and the nation as a whole, cannot afford to hand special tax breaks to the most affluent residents by slashing essential services such as health insurance for working families. New analysis of the Trump administration’s plan to make tax breaks from the 2017 tax law permanent shows that the proposal would do just that. It would make the wealthiest New Jerseyans even richer while cutting programs and support for families who need help affording basic necessities like food and health care.
This proposal means that the average tax break for the top 1 percent will be nearly 200 times the benefit of the lowest-earning 20 percent of the state’s households. And those differences add up: nearly half the benefits would go only to the top 5 percent of income earners.
Extending these tax breaks perpetuates regressive tax policy – sending enormous benefits to the richest 5 percent while doing little or nothing to help residents struggling to make ends meet.
For more on this analysis and its methodology and other state-by-state analyses, check out the Institute on Taxation and Economic Policy’s issue brief here.
New Jersey can and should make its own tax code fairer by raising rates on the wealthiest individuals and corporations, not giving them even more tax breaks.
