New Jersey Senate President Steven Sweeney on Tuesday said he is reevaluating the state’s millionaires tax, as it could increase the amount of high-earners leaving the Garden State.
“I hit the pause button for one reason: If this [tax reform] actually does happen, I am very concerned about the exodus of wealthy people out of these states that pay a large portion of our tax base,” Sweeney, a Democrat, told Stuart Varney on “Varney & Co.”
Governor-elect Phil Murphy is calling for the top income tax rate in New Jersey to increase to 10.75%, up from the current 8.97%. However, Sweeney said that while the millionaires tax was designed to generate money to fund education, the state has also taken steps to make living in the state more affordable.
“We cut taxes for earned income tax credit, we raised it to 35%. We cut taxes on retirees. We’re raising the exemption to $100,000 if you’re married. So we have cut taxes,” Sweeney said, adding that New Jersey is having issues providing money to its classrooms.
If passed, the federal Republican tax plan would eliminate state and local tax (SALT) deductions for New Jersey residents. The Democratic head of New Jersey’s Senate said his state, along with New York and California, are “under attack” by conservative lawmakers in Washington.
“If we lose the millions of dollars that they’re talking about and taxes are going to be raised on average families by $2,500 when they lose the deductions they’re going to get, how can you do anything? Right now we have to reevaluate where we’re going to go,” Sweeney said.