New Jersey “millionaires’ tax” is done deal

Tri-State /
Sep.September 17, 2020 02:09 PM
Gov. Phil Murphy (Getty; iStock)

Gov. Phil Murphy (Getty; iStock)

New Jersey is getting a new millionaires’ tax.

Lawmakers in the Garden State have agreed to raise taxes on residents earning more than $1 million per year as part of a budget deal, according to the New York Times. New Jersey Gov. Phil Murphy has pushed for a higher tax on the state’s wealthiest residents since taking office in 2018.

The so-called “millionaires tax” raises the tax rate on earnings over $1 million to 10.75 percent from 8.97 percent. The new rate is what individuals earning over $5 million are already taxed. The budget deal also includes a $500 tax credit for families with at least one child and income less than $150,000 and for single parents with income below $75,000.

Republican elected officials and some business leaders contend the millionaires’ tax will encourage wealthy residents to leave the state. But Gov. Murphy has a message for those who will be affected by the tax: “In this unprecedented time, when so many middle-class families and others have sacrificed so much, now is the time to ensure that the wealthiest among us are also called to sacrifice.”

Across the Hudson, Gov. Andrew Cuomo has hesitated to a support a similar tax on the wealthiest New Yorkers, even as the state faces a budget gap of $14.5 billion, because he fears they will move away. The state already has a “temporary” tax on high earners, first enacted in 2009 and extended several times since then, most recently last year through 2024. Under that provision, the top tax rate is 8.82 percent; in New York City, the rate combined with city taxes is 12.7 percent. [NYT] — Dennis Lynch


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