Likely Coming Soon to NJ: a Millionaires Tax

Gov. Phil Murphy's proposal to hike taxes for the rich will likely pass state Legislature
By Jenn Gidman,  Newser Staff
Posted Sep 18, 2020 9:26 AM CDT
Likely Coming Soon to NJ: a Millionaires Tax
In this Aug. 25, 2020, file photo, New Jersey Gov. Phil Murphy speaks at SHI Stadium at Rutgers University in Piscataway, NJ.   (AP Photo/Noah K. Murray, File)

In what's being called a "historic win for the middle-class," a proposal has been OKed by top New Jersey state Democrats to hike taxes on the rich. The plan, announced Thursday by Democrats Gov. Phil Murphy, Senate President Steve Sweeney, and Assembly Speaker Craig Coughlin, would raise the tax rate on income over $1 million from 8.97% to 10.75%, the rate now seen on income of more than $5 million. By doing so, the state hopes to raise $390 million. "We do not hold any grudge at all at those who have been successful in life," Murphy said at a presser, per Politico. "But 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." The Wall Street Journal notes the tax would apply to the 2020 tax year. Much of the money raised will go toward a rebate, issued next summer, of up to $500 for hundreds of thousands of families who make less than $150,000.

Sweeney had long been a vocal opponent of Murphy's tax idea. Thanks to the coronavirus, however, he's done a 180. "The pandemic hit and things have changed," he says. "We have to face the reality that a lot of families are hurting here." State GOPers aren't loving the plan, though, with some arguing that affluent residents will simply head to other states with lower taxes, like Florida. Others are suspicious of the timing. "Gov. Murphy is looking to play Santa Claus with taxpayer money as he heads into his reelection next year," state Sen. Mike Testa tweeted. Both the tax and rebate plans need to get the green light from the state Legislature, but as the Dems control both chambers, that's expected. The New York Times notes that at least eight other states—including New York and California—are considering similar tax hikes on the rich. (More New Jersey stories.)

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