Excerpt:
A six-year old income tax reform bill accomplished something remarkable in Trenton on Monday: It got Democratic and Republican lawmakers to agree on changing your tax policy.
The state Senate Budget and Appropriations Committee approved a Republican-backed measure, S676, that’s supposed to provide relief to New Jersey workers struggling to make ends meet amid the highest inflation levels in 40 years.
The concept is simple: If inflation goes up, so would New Jersey’s income tax brackets. For many, it would mean not having to pay higher taxes if salaries go up the rate of inflation.
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New Jersey uses a graduated income tax, which means residents shell out a larger percentage of earnings to the state as their incomes rise into higher tax brackets. When inflation pushes wages higher, it can often result in a net loss to workers that are pushed into higher brackets.
Author(s): Derek Hall
Publication Date: 2 Mar 2022
Publication Site: nj.com