Governor Phil Murphy has signed a contract with fellow Democrats who control state law to collect taxes on high-income people in New Jersey and write discounts to households in the state with an income less than $ 150,000 and at least one child, NJ Learned Advance Media.
The deal breaks a year-long impasse on the so-called millionaires tax, which Murphy has requested since the start of his term, but which lawmakers have rejected twice in previous talks on the state budget.
The third time, however, is the appeal.
State Assembly spokesman Craig Coughlin, D-Middlesex, slipped into the deal, which came Wednesday, three sources familiar with the talks told NJ Advance Media. The sources were not authorized to publicly announce the conversations and asked for anonymity.
The New Jersey Globe was the first to report that the leaders were close to a deal.
Murphy, Coughlin spokespersons and Senate President Stephen Sweeney, D-Gloucester declined to comment Wednesday night.
Murphy, Coughlin and Sweeney will officially announce the agreement on Thursday at 1
LOOK HERE: Governor Phil Murphy Announces Budget Deal So you can watch the press conference live today.
Under the plan, the gross state income tax rate for income between $ 1 million and $ 5 million would increase from 8.97% to 10.75%. People with incomes over $ 5 million already pay this highest marginal tax rate.
The Murphy administration estimates this will gross $ 390 million for 16,091 New Jersey residents and 19,128 non-residents.
Someone who makes $ 2 million would pay about $ 18,000 more in gross income tax, while someone who makes $ 4 million would pay about $ 71,000 more.
In return, households with incomes below $ 150,000 and with at least one child would receive a rebate check for $ 500.
It is unclear when this check would come.
According to sources, the discount checks are priced at $ 350 million.
Other key details of the bill are still being ironed out, sources said.
Murphy, an avowed progressive, campaigned for the millionaire tax increase and twice failed to get the tax hike through democratically controlled legislation.
After the Democrats, under Republican Governor Chris Christie, passed the millionaire tax five times, the Democrats said New Jersey had already been adequately taxed and that the state’s high-income individuals suffered a blow in Republican President Donald Trump’s tax overhaul.
The tax treaty solves part of the latest state budget that has to be passed by September 30th. Murphy has called for about $ 1 billion in tax hikes and $ 4 billion in loans to offset his government’s projected tax losses due to the coronavirus pandemic.
Coughlin and Sweeney hinted last month that they are still suspicious of tax hikes, especially with so many families and workers affected by the COVID-19 crisis.
According to sources, Coughlin agreed to the millionaire tax on the condition that there would also be a tax break for middle-class citizens.
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