New Jersey lawmakers just reached a deal on a new millionaires tax — along with a $500 rebate for families making less than $150,000

• Under a new proposal by state legislators in New Jersey, the tax rate on income over $1 million would increase from 8.97% to 10.75%.
• Republican leaders across New Jersey came out in retaliation against the so-called millionaires tax.
• A rebate up to $500 was also announced for families making less than $150,000, and for single-parent households earning up to $75,000.
• The proposals still need to pass the State Legislature by October 1, but there's a good chance of that happening with Democrats controlling both chambers of government.

Legislators in New Jersey reached a deal on Thursday for a so-called millionaires tax, a proposal to increase taxes on the state's millionaires.

Under the proposal by New Jersey Gov. Phil Murphy and other statewide elected officials, the tax rate on income over $1 million would increase from 8.97% to 10.75%.

New Jersey state legislators also announced a rebate up to $500 for families making less than $150,000, and for single-parent households earning up to $75,000. Rebate checks would be sent to eligible recipients in the summer of 2021.

The proposals still need to pass the State Legislature by October 1, but there's a good chance of that happening with Democrats controlling both chambers of government.

The millionaires tax comes as a part of Murphy's effort to provide financial relief amid the coronavirus pandemic for nearly 800,000 families in New Jersey, according to a statement from the governor's office.

New Jersey has taken a financial hit due to COVID-19. The New York Times reported on Thursday that over 1.5 million people in New Jersey have filed for unemployment benefits while more than 16,000 state residents have died.

"In this unprecedented time, when so many middle-class families and others have sacrificed a great deal, now is the time to ensure that the wealthiest among us are also called to make a modest sacrifice by paying pennies on the dollar more for any income over $1 million," said Murphy. "I thank the Senate President [Steve Sweeney] and Speaker [Craig Coughlin] for their partnership as we move forward with these initiatives that will spur resiliency and economic growth in our state."

If signed into law, the new tax rate would be equivalent to the one paid by New Jersey residents making more than $5 million annually. The state's millionaires tax is projected to generate nearly $390 million and is part of a nine-month, $32.4 billion budget plan that needs to be enacted at the state capitol by October 1.

Republican leaders across New Jersey have come out in retaliation against the millionaires tax, citing that it might hurt the pocket books of the everyday civilian.

"Blink and you'll miss the next Trenton tax hike," Doug Steinhardt, NJ GOP Chairman, said in a statement on Thursday. "Let's be clear, these newest tax schemes will land in the same place every other Democratic tax scheme lands: in the pockets of New Jersey's middle class. At a time when Trenton should practice restraint and find creative ways to spend less so you can save more, they don't, can't and won't."

Taxes for the wealthy are steadily becoming a topic of discussion across the US as the presidential election approaches.

An analysis on Monday by the University of Pennsylvania's Wharton School of Business' Budget Model found that households earning under $400,000 won't see their taxes increase while the top 0.1% might pay an additional 12.4% under Joe Biden, the Democrat nominee for President.