Gov. Phil Murphy and legislative leaders are close to a deal that would approve a millionaires tax accompanied with a tax cut for middle class families, the New Jersey Globe has learned.
The plan would give Democratic votes to Murphy’s plan to raise the tax rate of New Jerseyans in the top income-tax bracket.
In exchange Murphy has agreed in concept to support a proposal to give about 650,000 New Jersey families a tax cut of about $500, legislative sources told the Globe.
The tax cut, which would come next year when Murphy and the Legislature are on the ballot, would cost about $325 million.
The millionaires tax, which Murphy proposed as a candidate for governor and attempted to move through the legislature in 2018 and 2019 without success, is estimated to raise an additional $390 million for the state.
Murphy has asked to change the tax rate from 8.97% to 10.75% on households earning more than $1 million annually.
The plan has the backing of Senate President Steve Sweeney and Assembly Speaker Craig Coughlin.
Multiple sources have confirmed that Coughlin brought the idea of a middle class tax cut to Murphy and Sweeney.
Households with incomes of less than $150,000 with at least one child will qualify for the rebate, sources familiar with the negotiations said.
The governor made a new push for the millionaires tax last month in his second budget address of the year.
“Building a stronger New Jersey requires us to ask those who, in some cases, continued to prosper as this pandemic raged around us – and most certainly were hurt less – to do more so we can strengthen the middle-class families who are the backbone of our state,” he said in August.
The Legislature is expected to approve the budget before the September 30 deadline – a target that was set earlier this year when Murphy pushed off the deadline by three months as a result of the coronavirus pandemic.
Assembly Minority Leader Jon Bramnick is ready to oppose the proposal.
“We are already the number one exit state,” Bramnick said. “Governor Murphy is giving another gift to the Florida economy.”
The 2% Corporate Business Tax (BCT) that was approved for four-years in the 2018 budget will remain, but a proposed $15 million tax on opiods will be dropped from the final budget, according to those familiar with the budget deal.
This story was updated at 6:43 PM, again at 7:43 PM with comment from Bramnick, at 8:33 PM and again at 10:41 PM.