When New Jersey Gov. Phil Murphy (D) campaigned on a proposal to hike incomes taxes on the very richest sliver of his state, he would have expected to find easy traction with state lawmakers. They had sent such a tax package to Murphy’s predecessor Chris Christie (R) half a dozen times in the preceding years, seeing it vetoed each time.
But something funny happened on the way to the statehouse. Murphy’s partisan allies flipped, suddenly blanching at the 2-percentage-point hike on income over a million dollars that Murphy says would bring in three quarters of a billion dollars in new revenue.
And statehouse Dems aren’t keeping their newfound disagreement inside the tent. They’re actively collaborating with Christie, one of the Garden State’s most famous unemployed residents, to strategize against Murphy’s budget.
Christie was overheard making calls to Republican lawmakers and telling them he was “coordinating” with state Senate President Stephen Sweeney (D) to whip votes in favor of a tax plan that relies on short-term cash injections from corporate taxes and an amnesty program for people who owe the state money. A fellow Amtrak passenger heard the former governor tell the lawmakers he was calling to “feel out if they would support a budget veto override” after Murphy said he would rather let the state government shut down than agree to drop the millionaire’s tax to reflect Sweeney’s about-face.
The legislative leaders are angling for a smaller revenue bump. They have not yet published their budget proposal but it is widely reported to rely on a short-term hike in corporate taxes. Murphy’s call to raise the top marginal rate from about 9 percent to almost 11 percent is too steep, Sweeney says, because the roughly 39,000 New Jersey taxpayers it would target are losing the ability to write the hike off on their federal tax bill thanks to President Donald Trump’s giant tax cut.
Despite the millionaire’s tax centerpiece, Murphy’s budget isn’t exactly a progressive dreamboat. This is not the left’s version of the fantasy experimenting that ex-Gov. Sam Brownback (R) pushed through a one-party statehouse in Kansas almost a decade ago. Murphy’s plan gets almost as much new revenue from sales taxes ($581 million) as from millionaires ($765 million), undercutting the redistributive goals of high-end income taxes with a regressive bite out of lower-income families.
But that lack of radicalism would, until recently, have been treated as a virtue in most Democratic legislatures. Brownback’s extremism wrecked his state. Moderating one tax policy with another has traditionally warmed Dem hearts.
The strange, tense showdown in Trenton will end one way or another in the next 10 days. But the questions it raises for Democrats more broadly will linger well after New Jersey’s fiscal year deadline forces either a compromise or a shutdown at the end of June.
From the beginning of George W. Bush’s presidency through the middle of Barack Obama’s, Democrats grew expert at arguing against tax breaks for rich people. By the end of the Obama era, it was almost an article of faith. Any (D) who wants to win must explain the moral and mathematical bankruptcy of Republican trickle-down ideas. Bolder apostles of that tax-fairness church got adroit at calling for higher taxes on the people who they call for campaign checks.
All that experience, all those battle-tested legislative tactics and political messaging strategies, fell flat last fall. Faced with a determined Republican Party whose leaders knew that the divisive surface politics of Trump’s win masked a deep, decades-old unity on the idea that rich people should keep more of their money, the same partisan core came up empty. Though polling suggests most people understand that Trump’s tax plan will primarily benefit faceless corporations and already-wealthy individuals, the influence of the package over the midterms and Trump’s re-election bid remain wide-open questions.
And now New Jersey Dems are citing Trump’s law as a reason to abandon the tax-the-rich policy that has been a bare-minimum requirement for party hopefuls in recent years.
As battles for the party’s soul go, the showdown between Sweeney and Murphy over budget tables lacks for spice compared to the primary battles going on in many congressional races this summer.
But election consultants pay close attention to these kinds of things. Over the end of June, they’ll learn one of two lessons: Either economic populism is still vital to being a Democrat, or it isn’t.
If Sweeney succeeds, it will signal that the same appetite for moral outrage that once attached to tax policy is now being fed elsewhere. The consultants will then relay that lesson to their clients elsewhere, probably while they’re calling donors. Besides, they’ll say, the class-war stuff doesn’t even work in deep-blue Jersey anymore.
That’s the opposite approach to what most progressive strategists would urge. There’s no sign of an expiration date on the strategic upsides of attacking Republicans as faithful lackeys of the ultra-rich. It still shows up as a central plank in both wonkily specific recipes for victory and looser, fly-by-wire political columns aimed at the same premise. Many of the debutante Dem candidates for federal office this year are balancing a pocketbook-focused local message on taxes, wealth, and public service with a pointed moral clarity on the specific policy components of Trump’s cascadingly boorish reign. (Some of the veterans are, too.)
There’s no actual reason to think Democrats have to choose between the two. But as the New Jersey legislature’s willingness to betray its own ideas here suggests, the party’s pre-Bush complicity with the “temporarily embarrassed millionaires” mythos of American class politics is still alive in some corners.