Senator Declan O’Scanlon highlighted the delayed and failed tax relief in the FY 2023 State Budget that Governor Phil Murphy will sign today, including a payroll tax increase that takes effect tomorrow, ANCHOR rebates that won’t be delivered until 2023, and child tax credits that won’t help parents until 2024, and tax bracket creep that remains unaddressed.
Sen. Declan O’Scanlon highlighted the delayed and failed tax relief in the FY 2023 State Budget, including a payroll tax increase that takes effect on July 1, ANCHOR rebates that won’t be delivered until 2023, and child care tax credits that won’t provide relief until 2024, and tax bracket creep that remains unaddressed. (©iStock)
“The delayed and failed tax relief efforts in the Democrats’ budget when the state is ridiculously flush with funds will go down as one of the biggest missed opportunities in New Jersey history,” said O’Scanlon (R-13), the Republican Budget Officer. “Sadly, Democrats opted for huge increases in pork spending and the establishment of massive slush funds that will do nothing to help New Jersey families suffering today from high gas prices, soaring inflation, and property taxes.”
O’Scanlon pointed to four specific tax relief failures in the Democrats’ budget:
- Democrats failed to stop a $300 million payroll tax increase on employers that will take effect tomorrow, July 1. A convoluted plan proposed by Democrats to provide a tax credit to employers at some point in the future for some of the increased payroll taxes they will pay starting tomorrow did not advance. In contrast, the Senate Republican budget plan would have replenished the UI Fund directly using a portion of remaining federal relief funds to prevent the tax increase from taking effect. Republicans have proposed this several times, including last spring, last fall, and again during the current budget process.
- Democrats failed to provide immediate tax relief to families. Their ANCHOR rebate plan, which only includes $1.5 billion of new funding, will not deliver any relief to taxpayers until spring of 2023 at the earliest. Under ANCHOR, renters will only get a fraction of the maximum rebate, with some actually getting less than they received this year under the Homestead Benefit that’s being eliminated. In contrast, the “Give It Back” rebates proposed by Republicans would have provided $4.5 billion of rebates to 4 million households immediately. Unlike the ANCHOR plan, renters would not be treated differently under “Give It Back,” and most New Jersey families would qualify for the full $1,500 proposed by Republicans.
- Democrats failed to deliver timely relief to parents through their new Child Tax Credit programs, which won’t provide any help to low- and middle-income families until 2024. Since the legislation says the income tax credit doesn’t apply to tax years before 2023, New Jersey parents won’t receive the income tax credit until they file their 2023 tax returns in the spring of 2024. Families would need to make less than $30,000 to get the maximum $500 credit, while nobody with income over $80,000 would qualify. Again, the “Give It Back” rebates proposed by Republicans would provide $1,500 in immediate payments to most New Jersey families.
- Democrats failed to address “tax bracket creep” that the Murphy administration admitted will cost New Jersey income taxpayers an additional $543 million next year as they are pushed into higher income tax brackets by inflation. The comprehensive budget plan proposed by Senate Republicans called for indexing New Jersey’s income tax brackets for inflation as is done by the federal government and dozens of other states to prevent this massive tax increase.
“Democrats aren’t being honest with New Jerseyans who haven’t been told that the tax relief they’ve been promised could be years down the line,” added O’Scanlon. “That stands in stark contrast to the $8 billion of tax relief proposed by Senate Republicans that would stop looming tax and toll increases and give back $1,500 immediately to families that were overtaxed over the past year.”
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