June 8, 2025 — In a wide-ranging interview, New Jersey Governor Phil Murphy spoke candidly about recent political shifts in his state, the economic impact of federal tax policy, and his views on the direction of the Democratic Party.
Narrow Democratic Margin in 2024 Raises Concerns
Governor Murphy acknowledged the unexpectedly narrow victory for Vice President Kamala Harris in New Jersey during the 2024 presidential election. Harris won the traditionally blue state by just six points—a sharp contrast to President Biden’s large margin in 2020 and Hillary Clinton’s 16-point lead in 2016.
Murphy attributed the shift partly to former President Donald Trump’s unique appeal but noted a broader trend. “New York, New Jersey, Maryland, Illinois, and California all moved 10 to 12 points to the right,” he said. He also highlighted Republican gains in voter registration and admitted the Democratic Party has struggled to deliver a clear, compelling message.
SALT Cap Continues to Burden High-Tax States
The governor also addressed the ongoing impact of the SALT (state and local tax) deduction cap, originally implemented under the 2017 GOP tax bill. The cap disproportionately affects high-tax states like New Jersey by limiting the amount of state and local taxes residents can deduct from their federal returns.
Murphy said the cap reduces disposable income for New Jersey residents, indirectly harming small businesses. “We’ve managed to blunt some of the pain through smart policy and pandemic relief,” he noted, “but we still want the cap lifted entirely.” He criticized the latest congressional proposal for only offering a modest lift.
Tariffs and Trade Policy Stir Uncertainty
When asked about the reintroduction of tariffs, Murphy warned of inflationary consequences and a loss of trust in U.S. trade policy. “This back-and-forth damages America’s reliability as a global partner,” he said.
While acknowledging that New Jersey’s modern economy—centered around biotech, fintech, and green industries—may feel less immediate impact than manufacturing-heavy states, Murphy stressed that the state “won’t be immune.”
Unexpected Praise for Trump’s Early Pandemic Response
Murphy surprised some by crediting the Trump administration for its cooperation during the early months of the COVID-19 pandemic. He recalled how the federal government helped supply New Jersey with critical resources such as ventilators and personal protective equipment.
“I know how people on my side of the aisle may react, but the truth is, we got essential help that saved lives,” Murphy said, noting that he maintains occasional contact with Trump, especially on shared interests like infrastructure.
Vision for the Democratic Party
Looking ahead, Murphy emphasized the need for the Democratic Party to improve its grassroots efforts, deliver a clear economic message, and welcome a broad range of leadership. He said he’s not focused on age but rather talent and vision.
“I’m a proud progressive and a cold-blooded capitalist,” Murphy said. “Those two things are not at odds.” He advocated for focusing on affordability and opportunity, what he calls “kitchen table” issues, to reconnect with voters.
He also called for a return to Howard Dean’s 50-state strategy, which Murphy once supported as national finance chair for the Democratic National Committee. “We fail the basics too often—organizing, local presence, year-round engagement. Republicans beat us there,” he warned.
A Response to Anti-Capitalist Sentiment on the Left
Addressing the growing skepticism of capitalism among progressives, Murphy distinguished between “unfettered capitalism” and the inclusive capitalism championed by Democratic leaders like Bill Clinton and Barack Obama.
“In New Jersey, we raised the minimum wage, and instead of hurting small businesses, it helped them,” he said. “People had more money to spend, and that strengthened the middle class.”
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