Gov. Phil Murphy proposed a one-time $125 income tax credit for state residents as he seeks support for his millionaire’s tax from legislative leaders, many of whom still oppose the measure.
Murphy and his fellow Democrats, who control the state Legislature, have less than a month to reach a deal on the state budget, and neither side has budged on the millionaire’s tax, which would impose a 10.75 percent rate on every dollar earned above $1 million.
The governor has suggested that he would not sign a budget without the tax, a stance that could lead to a government shutdown if the spending plan is not approved by July 1.
Under the proposal – which Murphy unveiled on June 3 and said could benefit up to 2 million residents – the one-time $125 credit would be available to taxpayers when they file their 2019 gross income tax returns.
It would be part of the $250 million of property tax relief that Murphy has also said he would provide if the millionaire’s tax is enacted.
“Our middle class deserves tax fairness,” Murphy said. “They need direct property tax relief, more than ever. And the millionaires tax is the way to truly deliver for them.”
The tax credit would be limited to homeowners and renters who make between $10,000 and $250,000 a year in gross income.
Murphy said that lawmakers need to “find the courage to ask the wealthiest among us to pay their fair share.”
The millionaire’s tax would affect roughly 18,000 in-state residents and 19,000 out-of-state residents, generating roughly half a billion dollars in revenue.
“It really becomes a simple question: Who’s side are you on?” Murphy said. “Are you on the side of 2 million-plus New Jersey households who are taking it on the chin under President [Donald Trump’s tax plan?] Or are you on the side of the fewer than 19,000 millionaires who are making out just fine?”
Senate President Stephen Sweeney, D-3rd District and Assembly Speaker Craig Coughlin, D-19th District, both oppose the tax, arguing that the state is already too highly taxed.
