Murphy’s budget proposal includes a second go at a millionaires’ tax, after an unsuccessful attempt during last year’s budget talks.
The tax rate would earn an estimated $447 million for the state this coming year, according to State Treasurer Elizabeth Maher Muoio. The rate would kick in on “the first dollar over a million dollars earned,” Muoio said Monday.
A millionaires’ tax would be a hard sell for Senate President Stephen Sweeney, D-3rd District, one of the primary gatekeepers for Murphy’s budget proposal. Sweeney voted five times in favor of the millionaires’ tax, but former Gov. Chris Christie vetoed the proposal each time the state Legislature sent it to his desk.
During budget talks last year, Sweeney argued that a millionaires’ tax was no longer feasible because of the newly implemented $10,000 federal cap on state and local tax deductions – which would take a hit on many New Jersey residents who pay upwards of double that amount on their property tax bills.
The money from the millionaires’ tax would “ease [the] burden on middle and working class families,” according to budget materials obtained by NJBIZ.
The gross income tax rate would go up from 8.99 percent to 10.75 percent for those earning between $1 million and $5 million a year.
According to estimates, 18,066 state residents fall into that income bracket as do 19,057 non-state residents.
New Jersey’s current mega-millionaires’ tax casts a much smaller net, taxing 1,581 state residents and 5,085 non-state residents.