New Jersey To Increase Tax On Millionaires In Order To Help Families Struggling Due To Coronavirus Pandemic
TRENTON, N.J. (CBSNewYork) -- New Jersey high income earners will soon be paying more in taxes to help some middle and low income earners stay afloat amid the coronavirus pandemic.
People who make more than $1 million a year will see a tax increase of just under 2%. In exchange, that money will help struggling families.
Gov. Phil Murphy announced Thursday morning he struck a deal with the Legislature to provide relief to middle- and low-income households by increasing taxes on the wealthy.
"We do not hold any grudge at all against those who have been successful in life, but in this unprecedented time, when so many middle class families and others have sacrificed so much, now is the time to ensure the wealthiest among us are also called to sacrifice," Murphy said.
WATCH: Gov. Phil Murphy Gives Update On Millionaire's Tax & Rebates
Under the new plan, those making between $1 million and $5 million would see a tax rate increase of 1.78% -- from 8.9 to 10.75. People with incomes higher than $5 million already pay that top rate.
A single parent with income below $75,000 or married couples whose combined income is less than $150,000 with at least one child would receive a rebate check of up to $500.
"Five hundred dollars may be insignificant to some, but for those 800,000 families that will receive a $500 rebate, it goes a long way," said Lt. Gov. Sheila Oliver.
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Since he became governor, Murphy has been trying to push the millionaire's tax through. It was rejected twice by the Legislature but approved on the third try.
"The pandemic hit, and things have changed, and we have to face the reality that a lot of families are hurting here," State Senate President Stephen Sweeney said.
Murphy estimates this will bring in nearly $400 million for the state.
Some say the move could speed up the exodus of the wealthiest residents. Others disagree.
"If you make more, I feel like you can afford to give more," one person told CBS2's Natalie Duddridge
"If you have enough and you're living well enough and somebody isn't, I don't think that they should be taxed the same way," New Jersey resident Nadya Mickail said. "So I think it's a good idea."
If eligible, families can expect to get their rebate checks next summer. The plan is for it to recur year after year.
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