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Gov. Phil Murphy. (Photo: Kevin Sanders for New Jersey Globe)

Murphy: Tax rebate not a bid to boost re-election chances

Governor faces Republican criticisms over millionaire’s tax deal

By Nikita Biryukov, September 18 2020 3:47 pm

Gov. Phil Murphy attempted to bat away claims that a $500 tax rebate for certain New Jerseyans with children was a bid to boost his chances at winning re-election Friday.

“I didn’t set the tax filing dates or when you get your refunds, right? You had to file by April 15 in a normal year — we did not have a normal year this year, admittedly — and you get your refunds over the course of the summer,” Murphy said. “That’s not my schedule. That’s the schedule that has been in place forever and always.”

The rebate program, part of a deal to create a new tax bracket for individuals making more than $1 million annually reached with Democratic legislative leaders, won’t go into effect until after residents file their taxes next year.

That means some families will receive a non-recurring tax refund of up to $500 months before Murphy and every lawmaker in the legislature come up for re-election next year.

“It’s a gimmick that proves what we have said all along – higher taxes aren’t necessary to balance the budget,” Assemblywoman Serena DiMaso (R-Holmdel) said Thursday. “Murphy said he needed to raise taxes because revenues were dropping, but now it’s to fund special rebates next year when he is running for re-election.”

So far, the rebate is a one-shot, though Murphy hasn’t ruled out renewing it in later budgets. Individual filers making less than $75,000 per year and joint filers making up to $150,000 are eligible for the rebate, with awards based on filers’ incomes.

The program is expected to cost roughly $325 million, though the exact cost will depend on the number of eligible filers and the award structure.

Still, the program will cut into much of the revenue the millionaire’s tax is expected to bring in. That proposal, which will see the marginal tax rate for income over $1 million increase from 8.97% to 10.75% is estimated to bring in $390 million annually.

The governor insisted there’d still be money left over for other priorities.

“It’s funding health care. It’s funding housing, affordable housing, whatever it might be. That’s always been the mindset that has surrounded this,” Murphy said. “It is not only about this rebate. That is a really important piece of this, but this allows us to make investments, whether it’s a direct payment to folks who need it the most or whether it’s helping us fund K-12, pre-K expansion, health care programs. It is going exactly to the uses that we need as a state.”

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