New Jersey Millionaires' Tax a Double-Edged Sword for Bonds
- State’s bonds could get more valuable as tax shelters sought
- But some risk seen that wealthiest could move out of state
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A millionaire tax is a Catch-22 for New Jersey’s bondholders.
Taxing the rich at higher rates -- which Governor Phil Murphy proposed Tuesday as part of his $38.6 billion budget -- would likely boost demand for municipal bonds because the interest is exempt from federal and state taxes. But at the same time, some investors say the Garden State’s precarious finances could be worsened if wealthy people start moving out of a state where high property taxes are already a major complaint.