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TRENTON – As the deadline for action ticks ever closer, Senator Shirley K. Turner (D-Mercer/Hunterdon) today urged Governor Christie to sign the minimum wage bill (S3/A2162) and fully fund the Earned Income Tax Credit (EITC) to rescue working poor families who were saddled with a fifty percent payroll tax increase as part of the federal “fiscal cliff” deal.
“Many working families are being pushed over the edge as part of the ‘solution’ to the fiscal cliff,” declared the Senator. “Effective January 1, the Federal Insurance Contributions Act (FICA) tax imposed on employees increased from 4.2 percent to 6.2 percent.”
“This is a real hardship on most workers, but New Jersey’s working poor, who are already struggling to make ends meet, will be hit hardest; the two percent payroll tax increase means a significant loss of income from every paycheck,” continued Senator Turner. “Signing the minimum wage law and funding the EITC is the only fair way to mitigate the damage done to NJ families by the politicians down in Washington as part of their fiscal cliff deal shenanigans.”
The payroll tax holiday expired on December 31, 2012, and was not renewed as part of the federal “fiscal cliff” deal. The FICA tax, which is deducted from workers’ paychecks, will cause take home pay to decrease by $600 per year for workers with an annual income of $30,000. Workers with an annual income of $50,000 will bring home $1,000 less per year, while workers with an annual income of $100,000 will bring home $2,000 less per year. The New Jersey EITC, which was cut from 25 percent of the federal level to 20 percent in 2010, is a refundable income tax credit program that lessens the burden of payroll taxes that disproportionately affect lower income workers.
“That’s a real blow to not only working poor families who are making minimum wage and will have fewer dollars to spend, but also on all residents of New Jersey who are concerned about our sputtering economy,” said Senator Turner. “Our businesses will also feel the financial pinch, as consumers further tighten their belts. Mitigating the federal changes with minimum wage and EITC increases will put money directly into the economy, not hide it in some tax shelter. That helps to create more jobs,” said Senator Turner.
The Governor has until January 17 to sign the minimum wage law to avoid a pocket veto of the measure.
Senator Shirley K. Turner
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