New Jersey Gov. Phil Murphy announced a deal Thursday with lawmakers to hike taxes on the state’s wealthiest residents as part of a plan to provide relief to the middle class from the coronavirus crisis, according to CNBC.
The deal would raise the tax rate on those earning more than $1 million per year to 10.75% from 8.97%.
The increased tax revenue is supposed to potentially go to about 800,000 lower and middle-income families, who will get a tax rebate of up to $500 under a deal.
“We know that over the course of this pandemic and frankly before it began that our middle class needed help and that countless families working hard to achieve their middle-class dreams needed an extra push,” Murphy said.
A Fox Business article says that ‘the rebates are expected to cost about $350 million, leaving just $40 million in revenue from the tax increase for the government. Murphy said the leftover money will be put into “exactly what folks want” — such as school funding, health care and housing.’
The article also mentions that Murphy campaigned on a pledge to restore the state’s millionaires tax, which sunsetted in 2010 with the departure of Democratic Gov. Jon Corzine. Democrats have since voted to increase the tax rate on top-earners to 10.75%, but then-Republican Gov. Chris Christie vetoed those efforts.
State Republicans expressed disdain for the plan, with chairman of the New Jersey Republican Party Doug Steinhardt, saying in a statement that “these newest tax schemes will land in the same place every other Democratic tax scheme lands: in the pockets of New Jersey’s middle class.”
“Blink and you’ll miss the next Trenton tax hike,” Steinhardt said. “That’s how fast Phil Murphy and his Democrats are spending your money.”
CNBC says ‘If it’s signed into law, it would be one of the first in the country to address state revenue shortfalls caused by the economic crisis by upping collections on the rich.’
Murphy said he aims to have the tax finalized by October.