New Jersey Hiking Taxes on Higher Incomes

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New Jersey Hiking Taxes on Higher Incomes

New Jersey Governor Phil Murphy has long supported higher taxes on millionaires. After three years of trying to see his millionaire tax enacted, he finally got his way this week.

 

Legislators came to an agreement with the governor to increase the tax rate on the income of New Jersey residents that exceeds $1 million. The rate will go up from 8.97% to 10.75%. The state estimates that this will bring in around $390 million in new revenue. This tax hike is coupled with a one-time tax rebate for New Jersey taxpayers earning $150,00 per household (or $75,000 for a single taxpayer) of $500. The governor argues that these families have been hit hard by coronavirus and deserve some relief.

 

Gov. Murphy, who is from the Democratic Party's Progressive wing, ran for office on the platform of increasing taxes on higher income state residents. Legislators have been reluctant to embrace the governor's tax agenda in past years, however. This year, however, as the governor and legislators crafted a budget deal, they were looking for revenue to pay for coronavirus-related tax relief. They finally agreed on this tax hike to do so.

 

Supporters of the millionaire's tax contend that the wealthy need to pay more in taxes to help the lower- and middle-class residents of the state. They argue that the rich should sacrifice, especially during times of economic hardship. Opponents contend that wealthy New Jersey residents already pay high tax rates. They also note that the wealthy can easily move to other states if taxes in New Jersey are too high.

 

While the governor and legislative leaders have agreed to this tax increase, the legislature must formally vote on it. 

 

Do you support increasing taxes on people with incomes over $1 million?

 

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