Ciattarelli proposal to cut taxes for wealthy would likely lead to cuts in state services
State spending on education and public safety would almost certainly have to decrease if Ciattarelli’s proposal were implemented, experts say.
Republican gubernatorial candidate Jack Ciattarelli has promised to cut income taxes for the state’s highest earners, which will require either higher sales taxes, major service cuts, or both.
He says it in his campaign platform on his website. He’s said it in public statements over and over again for months.
“We’re going to look at every option as to how to better fund our state government,” Ciattarelli said at a June campaign rally, NorthJersey.com reported. “But I will say this, at the very least we’re going to restructure and simplify our income tax rates. Pennsylvania has a three percent flat tax for everybody. We’ve got eight brackets that go up as high as 10.75 [percent]. Think about that. Yeah. So we’re gonna simplify it. I’m in favor at the very least of three brackets – 3%, 4%, 5%”
This proposal, though, would help only the wealthiest New Jerseyans. The top two tax rates of 8.97% and 10.75% apply to residents earning between $500,000 and $1 million and over $1 million, respectively. Families earning under $300,000 per year pay 3.25% and as little as 1.4% for those earning $100,000 or less.
In that same speech, Ciattarelli praised the tax structure of Tennessee, which he had visited.The state has no income tax and relies heavily on sales tax for revenue.
“I just came back from Tennessee not too long ago,” Ciattarelli said during the June 4 rally. “We were on a fundraising trip there, and Tennessee has no income tax. What Tennessee has is a 10% sales tax on everything, including food and clothing.”
By contrast, New Jersey relies heavily on income tax and less on sales tax for revenue.
According to the state’s 2025-2026 tax and revenue outlook, New Jersey is projected to take in approximately $21 billion in income tax revenue during the current fiscal year, amounting to about 37% of its total projected revenue during that time frame. The state currently has a 6.625% state sales tax rate, which is expected to account for about 26% of its total projected revenue during the 2025-2026 fiscal year.
The amount of revenue lost from the top tax brackets would be enormous. New Jersey does not publish data breaking down revenue by tax bracket, but New Jersey Policy Perspective data shows that as of 2014, there were approximately 55,000 tax filers in New Jersey earning more than $500,000, all of whom pay taxes to the state.
“If you cut the personal income tax, there’s no way to avoid one of two outcomes,” said Eli Byerly-Duke, a state analyst at the Institute for Taxation and Economic Policy. “Either dramatic cuts in services or increases in other taxes.”
Indeed, Ciattarelli has pledged throughout his campaign to cut state spending by 30%. He hasn’t laid out in detail what he would cut, but said the state should cap per-pupil education spending. His website says that he will “create the NJ Department of Government Efficiency (NJDOGE), elevate it to a cabinet position, and put his Lieutenant Governor in charge of targeting and weeding out unnecessary spending and fraud in government through audits and investigations.”
The federal Department of Government Efficiency carried out chaotic firings and rehirings of staff in the federal government. As of Sept. 18, it claims to have cut $206 billion in federal spending, but federal data has repeatedly indicated that spending has continued to increase. The Treasury Department said in July that $142 billion in additional spending had occurred in the first half of 2025 compared to the same period the previous year.
Ciattarelli’s proposed tax cuts for the top brackets also echo Trump policy, notably in the Tax Cut and Jobs Act of 2017, which featured big reductions in federal income taxes for the nation’s wealthiest individuals and corporations. Those cuts were extended this year in Trump’s “One Big Beautiful” budget bill.
The Republican nominee says he wants to do in New Jersey “what Donald Trump has done at the national level.”
If Ciattarelli’s plan were to be effective at cutting spending — which lowering the income tax rates would almost certainly require it to be, as the state constitution requires a balanced budget — New Jerseyans could expect to see precipitous declines in levels of service provided by the state, Byerly-Duke said.
“The state would have to make cuts into core programming, and the biggest things that states spend money on are health care, schools and infrastructure, with substantial spending as well on public safety,” Byerly-Duke said. “And I just think there’s no way to avoid that with a cut like he’s described, that you would have to see service cuts in probably all of those areas.”
“Any time that [state governments are] cutting back on the top brackets, it’s a huge revenue loss for the state, and also it’s a huge tax cut for the wealthiest individuals,” said Peter Chen, a senior policy analyst at the New Jersey Policy Perspective think tank.
Chen pointed out that New Jersey already faces issues providing essential services like education even at current spending levels.
“In New Jersey, we’re seeing layoffs in school districts across the state, huge issues with teacher retention,” Chen said.
Another option, he said, might be for the state to cut property tax relief credits, which are popular with New Jerseyans. But there’s certainly not a simple solution that residents won’t feel, he said.
“There’s no easy way to replace the revenue lost by making substantial cuts in the income tax,” he said.
