TRENTON, NJ – In response to the Internal Revenue Service’s (IRS) recent adjustments to federal income tax brackets for inflation, New Jersey Senator Anthony M. Bucco is advocating for similar changes at the state level. Bucco’s proposed legislation aims to prevent tax bracket creep for New Jersey residents.
Bucco (R-25) highlighted that New Jersey is among the few states not indexing tax brackets annually for inflation. He expressed concern over stalled state legislation, warning that without action, New Jersey families might face higher state tax bills due to inflation-induced bracket creep.
Bracket creep occurs when inflation-driven cost-of-living increases push taxpayers into higher tax brackets, reducing their real income. A Rutgers University’s Center for Women & Work (CWW) report notes all New Jersey families, particularly minority households with lower average incomes, are affected by inflation.
Bucco’s bill, S-676, proposes indexing New Jersey’s gross income tax brackets to inflation annually, mirroring the federal government’s practice of over 40 years and that of most states. He emphasized that failure to adjust for inflation disproportionately impacts lower-income families and small business owners.
Senator Bucco urges his legislative colleagues and Governor Murphy’s administration to address this issue during the upcoming lame-duck session, emphasizing the need for relief for families living paycheck to paycheck.