Are YOU part of Murphy's MIDDLE CLASS? (2024)

Gov. Phil Murphyconstantly evokes the theme that his administration is all aboutworking for the middle class and the "aspiring middle class." But how does hedefine them?Who, exactly, are his policies intended to help?

I tried several times over the course of nearly a month to get an answer from the Governor's Office to that question. It was to no avail, despite assurances from a Murphy spokesman that a responsewould be forthcoming soon.It never came.

Admittedly, defining the middle class isn't easy. But it's an important question, particularly in a state whose governor keeps repeating thathe's a friend of the middle class —and whose progressive policies continue to put more pressure on New Jersey'soverwrought middle-class taxpayers.

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Which part of the middle class are Murphy's policies intended to benefit? Are they helping, or hurting, the middle-middle class andthose falling within the broadest definition of middle class — the middle 60 percent of taxpayers?

There is everyreason to believe Murphy's policies are primarily aimed athelping the lower 40 percent — largely atthe expense of the middle and upper middle class.Even before Murphy took office,New Jerseyhadthe fifth most progressive tax policy in the nation —meaning the higher your income, the biggeryour tax bite.If Murphy succeeds in pushing through the millionaire's tax, New Jerseywill challenge California as themost progressive.

The chart from the Institute on Taxation and Economic Policybelow shows how New Jersey's tax structure compares to national averages.

Even in the decade before Murphy was sworn in, New Jersey's tax policies were increasingly beneficial to the state's least affluent40 percent and punishing to the other 60 percent.

As the chart below indicates, in 2015— the latest year for which full information is available — those with annual gross incomes of more than $100,000 accounted for 32.9 percent of tax filersand contributed 88.5 of the state's income tax revenue. Conversely, the other 67.1 percent contributed about 11.3 percent.

In 2006, a decade earlier, households making more than $100,000 accounted for 26 percent of filers but contributed 83.1 percent of tax revenue. The biggest change between 2006 and 2015 was among households in the $100,000 to $500,000 income range. Those taxpayersaccounted for 30.7 percent of filers in 2015 but contributed 49.8 percent of income tax revenue. In 2006, they accounted for 24.4 percent of filers but contributed 40.7 percent of income tax revenue.

Philosophically, Murphy comes from the school that turns the Republicanmantra"rising tides lift all boats" on its head, meaning what's good for the rich is good for everyone else. Murphy believes that investment in those with the lowest incomes is good for everyone else. In the long term, there may be a case to be made for that. But in the short term, in a state where high taxes and government spending is driving people out of state, it seems reckless.

So, how is middle class defined? Traditionally, for those who use annual income as the measure— a somewhat crude measure for sure— it is generally defined in one of two ways: either those households in the second or third income quintiles, or those in the second through fourth quintiles —in other words, those in the middle 60 percent of household income.

Pew Research Center defines the middle class as all households with incomes between two-thirds and twice the national median. The late Princeton University economist Alan Krueger has popularized an income band of 50 to 150 percent around the median.

So in New Jersey, where the median household income in 2017 was about $80,000, according to the Census American Community Survey,the middle class as defined by Pew would include households with incomes ranging from about $53,000to $160,000. Krueger's middle class would range lower, from about $40,000to $120,000.

Many public officials and social scientistsare reluctant to define middle class purely in terms of household income, arguing that there are too many variables in people's financial situations to make incometerribly meaningful. The number of members in a household, their ages, property taxburden, health insurance costs and net wealth all factor in.

New Jersey Assembly Minority Leader Jon Bramnick, R-Union defines those in New Jersey's middle class as people"who are working one or two jobs and having a tough time meeting their expenses.... My concern is that there aren’t the reforms necessary to lessen the impact on that middle class."

Bramnickestimates that 60 to 70 percent of households are having trouble paying their bills.

Brandon McKoy, president of the liberal New Jersey Policy Perspective, believes all New Jerseyans benefit from programs and policies aimed athelping those with lower incomes.

Using the impact of the increase in New Jersey's minimum wage as anexample, McKoy said, "The state spends $750 million onMedicaidfor working people.If they make a decent wage, it’s reducing people who are in that program."

The same is true, he said, of Murphy's policy to providefree college tuition.Giving more people the skills to succeed"benefits the economy long term, contributing in multiple ways," he said. "In the medium term it reduces income disparities."

Regina Egea, presidentof the conservative Garden State Initiative, doesn't buy the argument that increasing spending for the less affluent benefits the state as a whole.

"Pursuing the strengthening of New Jersey's middle class," she said, "offers two possible paths: address the income levels needed to cover the costs that continue to escalate in our state, or address the underlying factors that have made New Jersey increasingly unaffordable and unattractive to the middle class.

"The first path, inflating incomes without related productivity gains, subsidizing educational activities without direct employment/income commitment or escalating the cost of our government above inflation levels, is unsustainable," Egea said. "It will ultimately collapse under its own weight and actually undermine the economic prosperity of the very individuals they aim to serve."

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As state lawmakers embarks on a new round of budget hearings, they should be asking themselveswhether Murphy's attempts to improve the life of the middle class, and to bringmore people into it, by increasing government spending on new programsis, in fact,helping drive out large swath's of New Jersey's broadly defined middle class.

The answer may depend on how Murphy defines "middle class." I, for one, would still like to know.

Randy Bergmann: 732-643-4034; @appopinion; rbergmann@app.com