Senator Raymond Lesniak introduced legislation to impose a millionaires tax that was in place until 2001, acting to “provide the state with the resources needed to meet the needs of its residents and to offset the revenue lost to the phase out of the estate tax that is part of the plan to renew the Transportation Trust Fund.”
The surcharge on the state’s wealthiest residents would generate $500 million to $600 million, money that could be used for an array of education, health care, safety and environmental protection programs vital to the well being of the state’s residents.
“A millionaires tax will have the wealthiest residents pay their fair share as a means of maintaining the services and programs that are so important to the overwhelming majority of people in New Jersey,” said Senator Lesniak. “This revenue will offset the planned elimination of the estate tax that is part of the proposal to renew the Transportation Trust Fund. The fiscal integrity of the state can’t afford to lose that revenue.
Senator Lesniak wants a “true” millionaires tax that would only to earnings above $1 million. It would increase the marginal rate from the current 8.97 percent to 10.75 percent on every dollar above the $1 million threshold.
The proposed three-year phase-out of the estate tax would replace the current $675,000 threshold with a $1 million exclusion taking effect December 31, 2016, increasing to $2 million for December 31, 2017, to $3 million for December 31, 2018 and eliminate it on December 31, 2019. The state budget will be reduced by $120 million the first year and by $540 million annually when fully phased in.
“My legislation will repeal the estate tax immediately, replace the lost revenue. And allow for the renewed Transportation Trust Fund, which is important for the state’s economy.”
There are an estimated 17,000 millionaires in New Jersey.
“The millionaires tax is part of a progressive tax structure that increases with the ability to pay,” said Senator Lesniak. “The wealthy have benefited the most from the economy in recent years as the wealth gap has widened and income inequality has become more pronounced. This is an issue of fairness.”