Rep. Josh Gottheimer, a congressman who is seeking the Democratic nomination for governor, unveiled a new tax cut plan today that he claimed would make New Jersey more affordable but critics called it “the Soprano State version of Reaganomics.”
While Gottheimer promises widespread property tax reductions, rebates for families and seniors, and financial incentives for businesses, critics argue that his proposal echoes traditional Republican tax policies, including elements of trickle-down economics.
In his campaign for governor, Gottheimer outlined a plan that would cut property taxes by an average of 14%, a move that he claims would position New Jersey to compete with neighboring states like Connecticut, which has a lower tax burden. Gottheimer also proposed giving renters a $500 income tax rebate, offering businesses $5,000 tax credits for creating new jobs, and implementing tax breaks for seniors and families.
“Since announcing my candidacy, I’ve heard from people all across New Jersey who are struggling with the high cost of living,” Gottheimer said at a press event in Park Ridge. “We must make Jersey more affordable, and when I’m governor, we will.”
But the right-wing politician’s tax plan, which he said would bring down state revenues by an estimated $2 billion, relies heavily on budget cuts, in a markedly different approach than those advocated by Newark Mayor Ras J. Baraka and Jersey City Mayor Steven Fulop.
“New Jersey’s budget is working well for the wealthiest by making the rest of us pay the bills,” said Baraka, whose constituency has far less wealth than backers of Wall Street darling Gottheimer. “New Jerseyans watch rent and property taxes increase at the same time they pay more for transportation, gas, groceries, insurance, healthcare, and all the while they receive fewer and less substantial services.”
In 2022, Fulop instituted a pilot program that gave residents a voice in the budget process and spending decisions. He also phased out corporate welfare for big developed and boasts that Jersey City has not granted a market rate tax abatement in more than seven years.
Inspired by Trump and billionaire Elon Musk’s so-called ‘Department Government Efficiency,’ Gottheimer proposes a comprehensive efficiency review to eliminate wasteful spending and improve state’s fiscal performance.
Gottheimer also suggested that cracking down on tax cheats and securing more federal funds could help balance the budget.
Gottheimer, self-described Blue Dog Democratic Rep. Mikie Sherill and former state Senate President Steve Sweeney, whose alliance with then-Governor Chris Christie reamed members of the state’s public employee unions, have been called moderates but in fact they are collaborators with the rising corporate aristocracy and they each have a fundraising track record to prove it.
The issue, critics argue, is that while tax cuts might provide short-term relief for residents, the long-term impact could mirror the effects seen in past Republican-led tax cuts that prioritize the wealthy and businesses while neglecting crucial public services. Plus, even big tax cuts offer very little to impoverished workers living paycheck to paycheck.
Experts have pointed out that these kinds of cuts often lead to reduced funding for education, healthcare, and other essential state services.
“Gottheimer’s plan mirrors the kinds of supply-side economic policies that Republicans have championed for decades,” said progressive champion Lisa McCormick. “While it promises tax cuts and business incentives, history has shown that these plans tend to disproportionately benefit the wealthy and corporations, with little guarantee of the widespread economic benefits that are often promised.”
Indeed, the centerpiece of Gottheimer’s plan — a $5,000 tax credit for businesses that create new jobs — mirrors typical Republican rhetoric around incentivizing private-sector job creation.
Studies have shown that such tax cuts often fail to deliver the promised jobs or economic growth, with many corporations using the benefits for stock buybacks or executive bonuses rather than expanding their workforce.
“Top tax rates were 90 percent during post-war period when the economy was booming and most Americans shared in the nation’s growing prosperity, but when taxes were slashed after 1980, some millionaires became billionaires and almost everyone else moved toward or into poverty,” said McCormick, who pointed out that $50 trillion moved from working class Americans to the tiny fraction of ultra-wealthy people at the top.
McCormick argued that trickle-down economic policies have exacerbated financial disparities, pointing to statistics indicating that the bottom 50% of Americans control just 2% of total household wealth, while the top 1% holds more wealth than the bottom 90% combined.
Moreover, while Gottheimer’s plan includes tax credits for middle- and low-income families, the overall structure may still provide significant relief to high-income households who benefit the most from property tax cuts.
Additionally, some worry that Gottheimer’s reliance on efficiency audits to find budget savings could be a vehicle for reducing funding for critical services. While Gottheimer promises to protect important programs, such as education and healthcare, critics fear that a 5% reduction in state spending could lead to cuts that disproportionately affect vulnerable populations.
“There’s a real concern that this is a Trojan horse for austerity measures disguised as fiscal responsibility,” McCormick added. “When tax cuts are so large, it’s hard to avoid the inevitable pressure to reduce public services.”
While Gottheimer’s tax plan has drawn criticism from his detractors, it is clear that it will be a defining issue in the governor’s race. His ambitious promise to balance tax cuts with budget savings merits intense scrutiny from voters and economists, who should question whether the scheme can deliver sustainable benefits to New Jersey’s residents.
As Gottheimer prepares for what promises to be a fiercely contested election, the effectiveness of his tax plan remains to be seen. However, it’s clear that his approach, with its emphasis on tax cuts and business incentives, reflects a broader political debate about the long-term economic future of New Jersey and whether trickle-down economics is the right solution for the state’s financial challenges.
The mayors of New Jersey’s two largest cities are locked in a battle against each other as well as rivals for the Democratic gubernatorial nomination who are quasi-Republicans.
Having the capacity to raise millions of dollars gives those GOP-lite contenders a distinct advantage despite President Joe Biden’s warning in his Jan. 15 farewell address that, “an oligarchy is taking shape in America of extreme wealth, power, and influence that literally threatens our entire democracy, our basic rights and freedoms, and a fair shot for everyone to get ahead.”
Gottheimer and Sherrill have made one of their top issues in Congress restoring the so-called SALT tax deductions —which are important to upper-class Americans but worthless to the 85 percent of residents who do not itemize their taxes returns and the remainder whose property tax bill is $10,000 or less.
Louise Walpin, a champion in the fight for marriage equality, claimed that another Bergen County Democrat, state Senator Paul Sarlo, abandoned the party’s principles by embracing divisive, MAGA-inspired rhetoric aimed at the transgender community.