GOP Plan for ‘Once-in-a-lifetime opportunity’ to Cut NJ Taxes
TRENTON – Assembly Republicans want to cut income taxes as part of the new state budget, part of a four-pronged plan for responding to an unprecedented surge in state revenues and surplus.
Assembly Minority Leader John DiMaio, R-Warren, said the tax brackets haven’t been adjusted in nearly a quarter-century – and that given inflation rates and the state’s multi-billion surplus, now is the time.
“It’s going to give long-term, sustainable relief to many, many New Jerseyans, particularly those on the lower end of the scale,” DiMaio said.
Taxes would be reduced on income under $128,455 for a single taxpayer and $256,910 for a married couple. Savings would amount to $1,600 for a married couple earning $110,000 or $1,000 for a single taxpayer with an income of $70,000, DiMaio said.
The 1.75% tax bracket that currently starts at $20,000 of income for a single-filer taxpayer would be applied starting at $34,255, according to the proposal. The 3.5% rate would start at $59,946, rather than $35,000; the 5.525% rate at $68,510, rather than $40,000; and the 6.37% rate at $128,455, rather than $75,000.
For married couples filing jointly, all those income thresholds are doubled. The plan also eliminates a 2.45% bracket that currently applies to married couples on their income between $50,000 and $70,000, described by critics as a marriage penalty in the tax code.
Assembly Republicans say they want the budget to include the largest rebates possible to residents to help them deal with inflation, restore aid to municipalities that gets diverted to the state, and reverse reductions in school aid planned for about one-third of school districts.
“This is probably a once-in-a-lifetime opportunity that we haven’t seen ever to take action to save people money versus finding ways to spend their money,” DiMaio said.
The Legislature and governor have about five weeks left to settle on a state budget. Republicans remain the minority party in the Legislature though have gained seats in the last few election cycles.
Assemblyman Hal Wirths, R-Sussex, said that while the state needs to hold onto some of its surplus – projected at around $10 billion – the rest must be returned to taxpayers. He said at budget hearings, Democratic lawmakers often pressed Cabinet officers on whether they could use more money for staff.
“Being on the budget committee for these couple of years, I don’t have faith in them not spending the money,” Wirths said. “If it’s sitting there, they spend it.”