
NJ Tax Bracket Creep
the staff of the Ridgewood blog
Ridgewood NJ, last week’s federal Producer Price Index report showed that prices for basic goods across the country surged at a rate unseen in 31 years.
As Jared Walczak of the Tax Foundation noted in an analysis, “Inflation is often called a hidden tax, but in many states it yields a far more literal tax increase as tax brackets fail to adjust for changes in consumer purchasing power.”
Unfortunately, many Garden State residents should also anticipate another surprise as inflation leads to income tax increases, coupled with weakened purchasing power.
The IRS on November 10th announced that it adjusted federal income tax brackets for the 2022 tax year, meaning the changes will impact tax returns filed in 2023.
With inflation currently being the highest it’s been since 1990, the changes made headlines and garnered interest across the country. Google Trends data shows searches for “2022 income tax brackets” spiked after the IRS made the announcement. But is this something the IRS does every year?
According to William J. Smith, of the Garden State initiative , “New Jersey’s state income tax brackets are fixed, unlike the federal government, which adjusts brackets. Since the 1980’s, your federal tax exemptions and deductions have been calibrated to acknowledge that as inflation rises, taxpayers spending power is reduced.
New Jersey’s lowest brackets are bunched close together for people making $75,000 or less. When tax brackets are very close together bracket creep happens as increased wages push taxpayers into a higher income tax bracket.
As a result of New Jersey’s progressive tax brackets, net income actually decreases over time when you factor in the cost of inflation. As a person’s income increases and pushes them into the next tax bracket, their buying power is actually less as a result of inflation all while they are paying more in taxes.”
Phil Murphy…..on the lowest level, how can any Sane person vote for that face? Jeez Louise
He’s a lying moron and anyone that voted him back him are morons and should be ashamed of themselves for thinking he would care about NJ people
The fact that him was voted back in as governor is deplorable. And the fact that he looks like a close resemblance to the Jim Carrey character “Fire Marshall Bill “ is even more of a joke! https://inlivingcolor.fandom.com/wiki/Fire_Marshal_Bill
Did NJ really vote for this clown again!???
This guy really need to do something on property tax it’s outrageous.