TRENTON, N.J. – In response to surging state revenues and record-high inflation, Assembly Republican Leader John DiMaio and Assembly Budget Officer Hal Wirths on Tuesday announced a four-point plan that would provide residents immediate relief in this year’s state budget and achieve sustainable tax reforms.
“Taxpayers can’t wait for relief. The cost of food, gas and goods is going up every day,” DiMaio (R-Warren) said. “Unlike other short-term budget proposals, Assembly Republicans’ comprehensive plan gives people the money in their pockets that they need now and long-term tax reforms that will continue to save them money over time. Tax cuts don’t cost money, because this money belongs to the taxpayers.”
At the top of the Republicans’ plan is an income tax cut for the middle class and poor. The measure would adjust the income threshold of the four lowest tax brackets to account for the effects of inflation since January 2000 – which is about 68%. It also eliminates the $50,000 tax bracket for joint filers, which created a built-in marriage penalty in the tax code. Married couples who file a joint tax return and earn $110,000 would see their tax reduced by about $1,600, while a single filer earning $70,000 would get a reduction of $1,000.
“Our plan benefits mostly low-wage and middle-class families, because they are the ones most affected by inflation, but everyone will see some kind of relief whether it is through lower property taxes or rebates,” Wirths (R-Sussex) said. “When the state is sitting on extra money because of overtaxation, you can guarantee the government will spend it. We plan to send it back to the taxpayers.”
The package of proposals also includes rebates to combat inflation, fully returning energy tax receipts to towns over two years to lower property taxes, and restoring school funding cuts under S2, the state law passed in 2018 that cut so-called “adjustment aid” to nearly 200 districts across the state.
The revised projected state surplus is between $6.9 and $7.8 billion. New Jersey is also sitting on roughly $3 billion in uncommitted American Rescue Plan funds.
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Current N.J. Income Tax Brackets:
Assembly GOP Proposed Brackets: