Millionaire Tax

Recently Governor Phil Murphy proposed a "Millionaire Tax" for those earning between $1M to $5M a year, with an increase in tax from 8.97% to 10.75% in taxes owed for those individuals. Murphy sites this is necessary due to the Pandemic which has caused the NJ government to have a serious loss of revenue, however, it is important to note that this has been in Murphy's vision since before taking office.

How will this affect you? Unless you are earning over $1M a year, you won't be affected. However, if this does apply to you there are a few things you can do, beside fleeing the state; 1.) Now might be a good time to increase your charitable contributions

2.) Defer compensation

3.) Reside outside of NJ for 183 days

On a larger scale, will NJ lead the pack of the other states, including NY and CA, who have also considered a "Millionaire Tax", but declined to do so. Perhaps, but there are fears of individuals with earnings at this level fleeing the state and further draining poorly funded government budgets.

I can personally tell you from an agents perspective the game has changed dramatically due to COVID, as individuals are working from home now more than ever, which frees up the need to be in any one particular location. It might be an interesting scenario to watch as currently there are so many fleeing our nation's larger cities for a multitude of reasons.

For further details and to read the entire news article, see the attached document.