NJ Dems Agree on Millionaire’s Tax [AUDIO]
The stage is set for the State Senate and the General Assembly to pass a State Budget Thursday. It is not the spending plan Gov. Chris Christie proposed and wants. It's a Democrat-sponsored budget that includes a tax hike that the governor said he definitely does not want.
A deal has been struck between State Senate President Steve Sweeney and Assembly Speaker Vinnie Prieto. To meet the state's obligations like fully funding the pension system, the two have agreed to propose a tax increase that would impact only the New Jersey residents earning $1 million a year or more.
"It's not by choice. No one runs around looking to raise taxes. I've got to be honest with you, it's the last thing you want to do," said Sweeney (D-West Deptford).
The state's highest income tax rate is 8.97 percent. Initially, Sweeney wanted the tax on those making $1 million a year or more to rise to 10.75 percent and generate $565 million in new revenue. The Senate president also wanted a new rate for those making between $500,000 and $1 million to be set at 10.25 percent and generate $155 million. Sweeney agreed with Prieto's plan to only hike the tax on those earning $1 million annually.
"Somebody making over a million dollars should be and I think would be willing to pay that little extra to help the rest of the residents," said Prieto (D-Secaucus). "The state has a revenue problem not a spending problem."
The Democrats' plan would also increase the corporation business tax. Christie has vowed to veto any tax hikes. Prieto and Sweeney said they'll deal with that issue if and when it happens. Sweeney said Democrats are trying to work with the governor and keep him in the loop, but the divide is obvious.
"We're still talking to him hoping that he would agree to something," Sweeney said. "We don't expect it. We expect it to be a Democrat budget."