TRENTON, NJ – Gov. Phil Murphy, alongside statewide leaders, today announced that the revised Fiscal Year 2021 (FY2021) budget will raise the state’s gross income tax rate on income between $1 million and $5 million per year.
The rate will increase from the current 8.97% to 10.75% for every dollar earned between $1 million and $5 million annually, bringing it in line with the rate for income earned over $5 million annually and back to the rate paid in 2010, according to Gov. Murphy. In announcing the so-called “Millionaire’s Tax,” the governor was joined by Lt. Gov. Sheila Oliver, Senate President Steve Sweeney, Assembly Speaker Craig Coughlin, Senate Budget Chair Paul Sarlo, and Assembly Budget Chair Eliana Pintor Marin.
“In this unprecedented time, when so many middle-class families and others have sacrificed a great deal, now is the time to ensure that the wealthiest among us are also called to make a modest sacrifice by paying pennies on the dollar more for any income over $1 million,” said Murphy.
The Governor and legislators also announced a tax cut that will pay an up to $500 rebate to approximately 800,000 New Jersey families with incomes under $150,000 per couple (or $75,000 for a single individual) with at least one dependent child. This rebate will be automatically distributed to eligible taxpayers in the summer of 2021.
“I am also proud to announce that we are taking the step of providing a $500 rebate for our middle-class families,” Murphy added. “I thank the Senate President and Speaker for their partnership as we move forward with these initiatives that will spur resiliency and economic growth in our state.”
“Helping middle class families to me, makes all the sense in the world at this time,” said Senate President Sweeney. “I want to thank the Governor and the Lieutenant Governor for their openness and their willingness to do this a little bit differently than we thought we were going to do. I am glad to be standing here with my colleagues.”
“The agreement that we reached will provide much needed tax relief for so many who can truly use a break,” said Assembly Speaker Coughlin. “It has always been a priority of all of us to help the middle class. I am pleased to join today with the Governor and the Senate President in support of increasing the tax rate on those earning more than a million dollars."
Republicans are less enamored with today’s announcement.
“Blink and you’ll miss the next Trenton tax hike,” said NJ GOP Chairman Doug Steinhardt. “That’s how fast Phil Murphy and his Democrats are spending your money. At a time when Trenton should practice restraint and find creative ways to spend less so you can save more, they don’t, can’t and won’t.”
“Governor Murphy’s plan to raise taxes is… a nightmare for New Jersey. News reports indicate the Democrats in the legislature will support this ill-conceived proposal,” said State Minority Leader Jon Bramnick (R-LD 21) on Twitter.
The final revised FY2021 budget will be announced ahead of the Sept. 30, 2020 deadline. It will take effect on Oct. 1, 2020.