Tax Platforms in NJ Governor’s Race Leave Out the Best Ideas (1)

With both major party candidates running on a platform to make New Jersey’s effective tax rates more competitive, the 2025 gubernatorial race has become a referendum on two very different tax policy approaches. Both have substantial flaws.

Jack Ciattarelli (R) is pitching sweeping tax cuts and caps that would fundamentally reshape the state’s revenue structure—bold but reckless. By contrast, Mikie Sherrill (D) is focusing primarily on administrative efficiencies and municipal service sharing. It’s cautious and sensible but lacks any urgency.

If either campaign wants to boost affordability, they should start with what works: targeted, progressive credits. These tools don’t grab headlines, but they do the heavy lifting of making life more livable.

In the Garden State, property taxes are the second-highest in the nation, income tax brackets span seven tiers, and the state relies heavily on a patchwork of agency fees, surcharges, and municipal aid that keeps local governments chugging along. Trying to lower taxes is a bit like trying to cut a tangled parachute in descent—you can do it, but your landing will be anything but soft if you get it wrong.

Ciattarelli’s plan aims to appeal to high earners, and it comes with all the familiar cautionary precedents. He proposes flattening the state’s income tax, which currently maxes out at 10.75% for those who make at least $1 million, to just three brackets ranging from 3% to 5%. His plan also aims to reduce the corporate tax rate by 1% annually over five years, which would make the corporate rate brackets top out at 4%.

This approach sounds like the 2012 tax experiment in Kansas, where then-Gov. Sam Brownback (R) slashed individual income taxes and exempted many businesses from paying any income tax at all. The reasoning was that the state’s growth from becoming more business-friendly would offset the revenue losses.

Instead, Kansas saw ballooning deficits, credit downgrades, school funding issues, and lagging job creation—leading to Republican lawmakers themselves rolling back the cuts a few years later. Ciattarelli appears to be asking New Jersey to try a similar gamble but is offering no clear path to avoid the same outcome.

The numbers just don’t pass the sniff test. New Jersey’s top income tax rate accounts for a significant share of revenue—fiscal estimates put it near $400 million annually. Flattening that rate to a maximum of 5% would be a daunting challenge without significant spending cuts, offsets, or replacement revenue.

A row house near the Grove Street Path train station in Jersey City, N.J.

Photographer: Stephanie Keith/Bloomberg via Getty Images

Both candidates also promise to tackle property taxes—a major pain point—but neither of their plans reckon with the structural forces that drive them up. Ciattarelli’s approach is aggressive, if potentially distortive: capping property taxes to a percentage of assessed value.

That may be administratively simple, but it could upend school funding and would disproportionately benefit taxpayers with higher-valued properties and further entrench property tax inequities.

Sherrill, by contrast, takes a more incremental route: pushing for shared services between municipalities and mandatory consolidation of small school districts to save on overhead costs. She avoids political landmines—and doesn’t promise direct, immediate tax relief. She also passes on attempting any structural tax reform.

If Ciattarelli wants to bulldoze through New Jersey’s tax structure and hope savings can be found in the rubble, Sherrill hopes to sand down its rougher edges and cut costs in a way that eventually leads to taxpayer savings. Both are constrained by constitutional school funding mandates, a home rule mandate that leaves much autonomy to local governments, and a property tax base that seems as politically untouchable as it is economically lopsided.

Sherrill’s promise to freeze utility rates using a state of emergency on day one also epitomizes the shortcomings of a technocratic approach in our bombastic era. The idea sounds bold, but utility prices are largely driven by wholesale energy markets, not state policy.

Even if a rate freeze happens, it would likely be little more than a symbolic gesture. And like Ciattarelli’s call to cut energy bills by banning offshore wind, it distracts from more effective ways to address long-term affordability.

Sherrill’s approach ultimately reflects the Overton window for Democrats in a high-cost, high-income, high-tax state—you can promise to run the government more efficiently, but advocating for serious policy reform risks alienating core constituencies. That is, if you announce plans to tax the rich more aggressively, they may not vote for you.

And the 2025 campaign has now entered its posturing and righteous indignation phase—with Ciatterelli threatening to sue Sherrill for defamation over her claim that his former publishing company profited from pushing opioid misinformation. The lawsuit may or may not end in court, but it has already succeeded in one respect: It has pulled attention away from the policies that will actually shape affordability in New Jersey.

To pursue affordability, New Jersey’s next governor should put more money directly into the hands of people most burdened by the state’s high cost of living—and do so without laundering it through the market and trickle-down economics.

The earned income tax credit is a good place to start—and in fairness, Sherrill’s platform supports expanding it. New Jersey already has a generous state version of the federal program, but it could be expanded to better match the federal benefits in dollar amount and extended to unpaid caregivers—a group often excluded despite facing high living expenses.

Sherrill also backs a state-level child tax credit that would align New Jersey more with states including California and Colorado, which have shown how focused and tested policy for delivers immediate relief to low- and middle-income families.

Unlike Ciattarelli’s tax cuts for the rich or her own focus on administrative efficiencies, these credits’ efficacy doesn’t rely on outmoded economic theory or undertaking a Garden State version of a performance audit. They’re poverty policy standbys that already exist and can be scaled up quickly. Most importantly, such credits can provide targeted relief to those with the least wiggle room in their budgets rather than corporations or those with the highest-value property.

Ciattarelli deserves credit for naming affordability as a central challenge, and Sherrill’s support of expanded earned income and child tax credits is laudable. New Jersey voters deserve solutions that treat economic challenges as policy failures that can be fixed, not abstract problems.

Andrew Leahey is an assistant professor of law at Drexel Kline School of Law, where he teaches classes on tax, technology, and regulation. Follow him on Mastodon at @andrew@esq.social

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