Bill Text: NJ A1404 | 2018-2019 | Regular Session | Introduced


Bill Title: Revises gross income tax rates for joint filers and similar taxpayers and designated as Marriage Penalty Elimination Act.

Spectrum: Partisan Bill (Republican 14-0)

Status: (Introduced) 2018-06-07 - Motion To Table (Greenwald) (44-24-0) [A1404 Detail]

Download: New_Jersey-2018-A1404-Introduced.html

ASSEMBLY, No. 1404

STATE OF NEW JERSEY

218th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2018 SESSION

 


 

Sponsored by:

Assemblyman  ANTHONY M. BUCCO

District 25 (Morris and Somerset)

Assemblywoman  BETTYLOU DECROCE

District 26 (Essex, Morris and Passaic)

Assemblyman  EDWARD H. THOMSON

District 30 (Monmouth and Ocean)

 

Co-Sponsored by:

Assemblywoman Handlin, Assemblymen Howarth, McGuckin, DiMaio, Space, S.Kean, Clifton, Bramnick, Assemblywoman N.Munoz and Assemblyman Peterson

 

 

 

 

SYNOPSIS

     Revises gross income tax rates for joint filers and similar taxpayers and designated as Marriage Penalty Elimination Act.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel.

  


An Act revising the gross income tax rates for joint filers and similar taxpayers and designated as the Marriage Penalty Elimination Act, and amending N.J.S.54A:2-1.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    N.J.S.54A:2-1 is amended to read as follows:

     54A:2-1. Imposition of tax. There is hereby imposed a tax for each taxable year (which shall be the same as the taxable year for federal income tax purposes) on the New Jersey gross income as herein defined of every individual, estate or trust (other than a charitable trust or a trust forming part of a pension or profit-sharing plan), subject to the deductions, limitations and modifications hereinafter provided, determined in accordance with the following tables with respect to taxpayers' taxable income:

     a.     For married individuals filing a joint return and individuals filing as head of household or as surviving spouse for federal income tax purposes:

     (1)   for taxable years beginning on or after January 1, 1991 but before January 1, 1994:

 

If the taxable income is:                      The tax is:

 

Not over $20,000.00 . . . .                   2% of taxable income

 

Over $20,000.00 but not

     over $50,000.00 . . . . .                   $400.00 plus 2.5% of the excess over $20,000.00

Over $50,000.00 but not

     over $70,000.00 . . . . .                   $1,150.00 plus 3.5% of the excess over $50,000.00

Over $70,000.00 but not

     over $80,000.00 . . . . .                   $1,850.00 plus 5.0% of the excess over $70,000.00

Over $80,000.00 but not

     over $150,000.00 . . . . .                 $2,350.00 plus 6.5% of the excess over $80,000.00

 

Over $150,000.00 . . . . . . . .   $6,900.00 plus 7.0% of the excess over $150,000.00

 

     (2)   for taxable years beginning on or after January 1, 1994 but before January 1, 1995:

If the taxable income is:                      The tax is:

Not over $20,000.00 . . .                     1.900% of taxable income

 

Over $20,000.00 but not

     over $50,000.00 . . . .                     $380.00 plus 2.375% of the excess over $20,000.00

Over $50,000.00 but not

     over $70,000.00 . . . .                     $1,092.50 plus 3.325% of the excess over $50,000.00

Over $70,000.00 but not

     over $80,000.00 . . . .                     $1,757.50 plus 4.750% of the excess over $70,000.00

Over $80,000.00 but not

     over $150,000.00 . . . .                   $2,232.50 plus 6.175% of the excess over $80,000.00

 

Over $150,000.00 . . . . . . .                 $6,555.00 plus 6.650% of the excess over $150,000.00

 

     (3)   for taxable years beginning on or after January 1, 1995 but before January 1, 1996:

 

If the taxable income is:                      The tax is:

 

Not over $20,000.00 . . . .                   1.700% of taxable income

 

Over $20,000.00 but not

     over $50,000.00 . . . . .                   $340.00 plus 2.125% of the excess over $20,000.00

Over $50,000.00 but not

     over $70,000.00 . . . . .                   $977.50 plus 2.975% of the excess over $50,000.00

Over $70,000.00 but not

     over $80,000.00 . . . . .                   $1,572.50 plus 4.250% of the excess over $70,000.00

Over $80,000.00 but not

     over $150,000.00 . . . . .                 $1,997.50 plus 6.013% of the excess over $80,000.00

 

Over $150,000.00 . . . . . . .                 $6,206.60 plus 6.580% of the excess over $150,000.00

 

     (4)   for taxable years beginning on or after January 1, 1996 but before January 1, 2004:

 

If the taxable income is:                      The tax is:

Not over $20,000.00 . . . . .                 1.400% of taxable income

Over $20,000.00 but not

     over $50,000.00 . . . . .                   $280.00 plus 1.750% of the excess over $20,000.00

 

Over $50,000.00 but not

     over $70,000.00 . . . . .                   $805.00 plus 2.450% of the excess over $50,000.00

 

Over $70,000.00 but not

     over $80,000.00 . . . . .                   $1,295.50 plus 3.500% of the excess over $70,000.00

Over $80,000.00 but not

     over $150,000.00 . . . . .                 $1,645.00 plus 5.525% of the excess over $80,000.00

 

Over $150,000.00 . . . . . . . .   $5,512.50 plus 6.370% of the excess over $150,000.00

 

     (5)   for taxable years beginning on or after January 1, 2004 but before January 1, 2018:

 

If the taxable income is:                      The tax is:

 

Not over $20,000.00 . . . . . . .             1.400% of taxable income

 

Over $20,000.00 but not

     over $50,000.00 . . . . . . .               $280.00 plus 1.750% of the excess over $20,000.00

Over $50,000.00 but not

     over $70,000.00 . . . . . . . .             $805.00 plus 2.450% of the excess over $50,000.00

Over $70,000.00 but not

     over $80,000.00 . . . . . . .               $1,295.50 plus 3.500% of the excess over $70,000.00

Over $80,000.00 but not

     over $150,000.00 . . . . . . .             $1,645.00 plus 5.525% of the excess over $80,000.00

Over $150,000.00 but not

     over $500,000.00 . . . . . .               $5,512.50 plus 6.370% of the excess over $150,000.00

 

Over $500,000.00 . . . . . . . .   $27,807.50 plus 8.970% of the excess over $500,000.00

 

     (6)   for taxable years beginning on or after January 1, 2018:

 

Not over $40,000.00 . . . . . . .             1.400% of taxable income

Over $40,000.00 but not

     over $70,000.00 . . . . . . .               $560.00 plus 1.750% of the excess over $40,000.00

 

Over $70,000.00 but not

     over $80,000.00 . . . . . . .               $1,085.00 plus 3.500% of the excess over $70,000.00

Over $80,000.00 but not

     over $150,000.00 . . . . . . .             $1,435.00 plus 5.525% of the excess over $80,000.00

Over $150,000.00 but not

     over $500,000.00 . . . . . .               $5,302.50 plus 6.370% of the excess over $150,000.00

 

Over $500,000.00 . . . . . . . .   $27,597.50 plus 8.970% of the excess over $500,000.00

 

     b.    For married individuals filing separately, unmarried individuals other than individuals filing as head of household or as a surviving spouse for federal income tax purposes, and estates and trusts:

 

     (1)   for taxable years beginning on or after January 1, 1991 but before January 1, 1994:

 

If the taxable income is:                      The tax is:

 

Not over $20,000.00 . . . . .                 2% of taxable income

 

Over $20,000.00 but not

     over $35,000.00 . . . . .                   $400.00 plus 2.5% of the excess over $20,000.00

Over $35,000.00 but not

     over $40,000.00 . . . . .                   $775.00 plus 5.0% of the excess over $35,000.00

Over $40,000.00 but not

     over $75,000.00 . . . . .                   $1,025.00 plus 6.5% of the excess over $40,000.00

 

Over $75,000.00 . . . . . . . .                 $3,300.00 plus 7.0% of the excess over $75,000.00

 

     (2) for taxable years beginning on or after January 1, 1994 but before January 1, 1995:

 

If the taxable income is:                      The tax is:

 

Not over $20,000.00 . . . . .                 1.900% of taxable income

Over $20,000.00 but not

     over $35,000.00 . . . . .                   $380.00 plus 2.375% of the excess over $20,000.00

 

Over $35,000.00 but not

     over $40,000.00 . . . . .                   $736.25 plus 4.750% of the excess over $35,000.00

 

Over $40,000.00 but not

     over $75,000.00 . . . . .                   $973.75 plus 6.175% of the excess over $40,000.00

 

Over $75,000.00 . . . . . . . .                 $3,135.00 plus 6.650% of the excess over $75,000.00

 

     (3)   for taxable years beginning on or after January 1, 1995 but before January 1, 1996:

 

If the taxable income is:                      The tax is:

 

Not over $20,000.00 . . . . .                 1.700% of taxable income

 

Over $20,000.00 but not

     over $35,000.00 . . . . .                   $340.00 plus 2.125% of the excess over $20,000.00

Over $35,000.00 but not

     over $40,000.00 . . . . .                   $658.75 plus 4.250% of the excess over $35,000.00

Over $40,000.00 but not

     over $75,000.00 . . . . .                   $871.25 plus 6.013% of the excess over $40,000.00

 

Over $75,000.00 . . . . .                       $2,975.80 plus 6.580% of the excess over $75,000.00

 

     (4) for taxable years beginning on or after January 1, 1996 but before January 1, 2004:

 

If the taxable income is:                      The tax is:

 

Not over $20,000.00 . . . . .                 1.400% of taxable income

 

Over $20,000.00 but not

     over $35,000.00 . . . . .                   $280.00 plus 1.750% of the excess over $20,000.00

Over $35,000.00 but not

     over $40,000.00 . . . . .                   $542.50 plus 3.500% of the excess over $35,000.00

Over $40,000.00 but not

     over $75,000.00 . . . . .                   $717.50 plus 5.525% of the excess over $40,000.00

 

Over $75,000.00 . . . . .                       $2,651.25 plus 6.370% of the excess over $75,000.00

 

     (5)   for taxable years beginning on or after January 1, 2004:

 

If the taxable income is:                      The tax is:

 

Not over $20,000.00 . . . . .                 1.400% of taxable income

 

Over $20,000.00 but not

     over $35,000.00 . . . . .                   $280.00 plus 1.750% of the excess over $20,000.00

Over $35,000.00 but not

     over $40,000.00 . . . . .                   $542.50 plus 3.500% of the excess over $35,000.00

Over $40,000.00 but not

     over $75,000.00 . . . . .                   $717.50 plus 5.525% of the excess over $40,000.00

Over $75,000.00 but not

     over $500,000.00 . . . . .                 $2,651.25 plus 6.370% of the excess over $75,000.00

 

Over $500,000.00 . . . . .                     $29,723.75 plus 8.970% of the excess over $500,000.00

 

     c.     For the purposes of this section, an individual who would be eligible to file as a head of household for federal income tax purposes but for the fact that such taxpayer is a nonresident alien, shall determine tax pursuant to subsection a. of this section.

(cf: P.L.2004, c.40, s.17)

 

     2.    This act shall take effect immediately and apply to taxable years beginning on or after January 1, 2018.

 

 

STATEMENT

 

     The bill revises the gross income tax rates for joint filers and similar taxpayers and is designated as the Marriage Penalty Elimination Act. 

     As is common with progressive income tax structures, a marriage penalty occurs when married taxpayers, who would have otherwise faced a lower income tax liability by remaining single and filing individual tax returns, face a higher tax liability due to their marital status and filing their taxes jointly.  For the sake of tax equity, the bill would amend the tax brackets for those filing jointly to align the tax brackets with those imposed on taxpayers filing individual tax returns.  These changes would lower the gross income tax liability of most joint filers.

     The bill accomplishes eliminating the so-called marriage penalty by making the following changes to the tax brackets of joint filers:

         Taxable income up to $40,000 would be taxed at a rate of 1.40 percent. 

         Taxable income over $40,000 but not over $70,000 would be taxed at a rate of 1.75 percent.

     The bill would take effect immediately and apply to taxable years beginning on or after January 1, 2018.

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