Thank You Trump and NJ Accountants

New Jersey got an extra $4 billion in taxes this quarter which normally would make for a self-congratultory hearing today as the Murphy administration looks to take more bows but, for some reason, it was reported:

State Treasurer Elizabeth Maher Muoio and the OLS analysts were supposed to discuss the revenue update Wednesday at a much-anticipated Assembly Budget Committee hearing. That was to give lawmakers an opportunity to publicly pore through the latest budget forecasts. But the hearing was canceled at the last minute Tuesday.

That reason is that the explanation would need to focus on the massive PPP bailout that Trump’s people pushed through and New Jersey accountants recognizing free money when they see it. Based on personal experience…

Any payments made by businesses during a three month period in 2020 to keep people employed could be made from federal government loans that would be automatically forgiven. Salaries were the big budget item here so let’s concentrate on that in this example.

Assume regular pre-covid monthly payroll of $10,000 so apply for a loan of $30,000. But what if you anticipated having to pay $20,000 per month? Especially when you are paying yourself and getting the money upfront, why not? Apparently New Jersey accountants (like Murphy’s opponent in the upcoming gubernatorial election) made such recommendations which added about $70 billion to taxable incomes in New Jersey.

But what happens when there is no more bailout money and the debts created have to be paid back? As always, that’s a post-election (if ever) topic.

2 responses to this post.

  1. Posted by Stephen Douglas on June 9, 2021 at 12:21 pm

    Small businesses cry foul as states tax federal bailouts

    Indeed, while the Internal Revenue Service won’t tax forgiven PPP loans, Vermont became one of 11 states – including California, Florida, Hawaii, Minnesota, Nevada, New Hampshire, North Carolina, Texas, Utah, and Washington – that chose to tax PPP loans or have been considering it. At least 10 other states reversed course earlier this year and decided not to impose taxes, according to the Tax Foundation, a nonprofit policy think-tank.

    Reply

    • Posted by Rex the Wonder Dog!🐶🐶🐶🐾🐾🐾 on June 9, 2021 at 11:10 pm

      If we could only tax you Monkey Boi for every stupid comment you post we could solve NJ budget deficits and cure their pension debt….😺😺😺

      Reply

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