Holiday season inflation makes New Jersey more expensive than ever
Inflation in New Jersey is costing you 25% more than the national average, according to congressional data released recently.
Prices have risen by 15% since January 2021, costing the average household $11,175 more per year. That is higher than the national average of 13.8% inflation, costing the average American household $8,963 even if prices stop increasing. That is a $2,209 difference, which means, unfortunately, inflation is costing New Jerseyans 25% more than the national average.
Inflation has an even bigger impact because our state is already overly expensive. Taxes play a big part in that, as we know all too well with our ever-higher property taxes. In fact, Gov. Phil Murphy, with the support of legislative Democrats, has raised taxes by $16.7 billion. And the cost of living has risen by $22,750 since he took office.
The result is that an average New Jersey family is considered low-income by the federal government despite earning $21,591 more than the average American family — $96,346 compared with $74,755. Earning nearly six figures should not qualify as low-income. In most places that is upper-middle-class if not solidly middle-class. But not in the Garden State. The cost of living has made it hard for people to afford the holiday season they dream about without taking on more debt, setting them back even further financially.
It doesn’t need to rise twice as fast as incomes, especially in states that are more expensive than most. Raising taxes, which makes life even more expensive, is a big reason for that rise. That is why people earning nearly $100,000 are low-income in New Jersey.
Meanwhile, a family of four in New Jersey with nobody working can be given up to $108,857 in government benefits. That’s $12,511 more than the average New Jersey household earns in a year, and $34,102 more than the average American working family. The only way New Jersey can afford giving so much is by taxing so much and making life more expensive for everyone else. The holiday season has been no exception.
The record spending this holiday season isn’t because people are buying more, it is because prices are higher. Plus, inflation is permanent and prices won’t be coming down. Because incomes aren’t rising as fast as prices, people are spending more with less, increasing holiday stress.
Taxes are the one thing government can control in the cost-of-living equation. Lowering income taxes and sales taxes would help people afford more during the holiday season and save year around. Lowering taxes on businesses can incentivize higher wages, prevent price hikes or both. The unemployed family of four that can receive nearly $109,000 in government benefits will still be considered in poverty. High taxes are just putting more people in that position.
New Jersey’s unemployment rate is the third-highest in the nation. Household surveys show that 50,000 people have lost a job since July. IRS data showed that a net 25,854 people left New Jersey in 2020 and 2021, with an average adjusted gross income of $146,979, and most were prime working age. New Jersey is losing jobs and workers, making it harder for people to have the Christmas they wanted to provide for friends and family.
This holiday season is more expensive than ever before because New Jersey’s high cost of living has exacerbated inflation. Tax cuts that benefit the middle-class and low-income families will actually make the Garden State affordable again, and create more jobs and economic activity in the process.
On New Jersey’s current path, next holiday season will be even more expensive.
Assemblyman Christopher DePhillips represents parts of Bergen, Essex and Passaic counties in the 40th Legislative District. He will become the GOP conference leader on Jan 9.
This article originally appeared on NorthJersey.com: Holiday season inflation makes NJ more expensive than ever
