New Jersey: Who Pays? 7th Edition
New Jersey
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All figures and charts show 2024 tax law in New Jersey, presented at 2023 income levels. Senior taxpayers are excluded for reasons detailed in the methodology. Our analysis includes nearly all (99.9 percent) state and local tax revenue collected in New Jersey.
State and local tax shares of family income
| Top 20% | |||||||
| Income Group | Lowest 20% | Second 20% | Middle 20% | Fourth 20% | Next 15% | Next 4% | Top 1% |
| Income Range | Less than $32,500 | $32,500 to $64,200 | $64,200 to $109,000 | $109,000 to $172,800 | $172,800 to $390,400 | $390,400 to $844,700 | Over $844,700 |
| Average Income in Group | $19,100 | $47,500 | $84,200 | $136,300 | $251,400 | $575,400 | $1,820,200 |
| Sales & Excise Taxes | 5.7% | 4.3% | 3.6% | 2.9% | 2.2% | 1.4% | 0.9% |
| General Sales–Individuals | 2.7% | 2.3% | 2% | 1.6% | 1.2% | 0.7% | 0.3% |
| Other Sales & Excise–Ind | 1.8% | 1% | 0.6% | 0.5% | 0.3% | 0.2% | 0.1% |
| Sales & Excise–Business | 1.2% | 1% | 0.9% | 0.8% | 0.7% | 0.5% | 0.5% |
| Property Taxes | 4.5% | 3.8% | 4.7% | 5.4% | 4.7% | 3% | 2.2% |
| Home, Rent, Car–Individuals | 3.9% | 3.3% | 4.1% | 4.9% | 4.2% | 2.4% | 0.8% |
| Other Property Taxes | 0.5% | 0.5% | 0.5% | 0.5% | 0.6% | 0.6% | 1.4% |
| Income Taxes | -1.6% | 1.1% | 2.5% | 3.6% | 4.2% | 5% | 7.3% |
| Personal Income Taxes | -1.6% | 1.1% | 2.4% | 3.6% | 4.1% | 4.9% | 7.1% |
| Corporate Income Taxes | 0% | 0% | 0% | 0% | 0.1% | 0.1% | 0.2% |
| Other Taxes | 0.2% | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% |
| TOTAL TAXES | 8.8% | 9.4% | 10.8% | 12% | 11.1% | 9.4% | 10.5% |
| Individual figures may not sum to totals due to rounding. | |||||||
ITEP Tax Inequality Index
New Jersey has a hybrid system that is progressive through some parts of the income distribution and regressive through other parts. On balance, the overall system tilts slightly progressive according to ITEP’s Tax Inequality Index because low-income families pay somewhat lower tax rates than other groups. New Jersey ranks 46th on the Index, meaning that four states and the District of Columbia have more progressive systems. (See Appendix B for state-by-state rankings and the report methodology for additional detail.)
Tax features driving the data in New Jersey
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Requires combined reporting for the corporate income tax but excludes profits booked overseas, including in tax haven countries
Refundable property tax “circuit breaker” credit (all ages, includes renters)
Graduated personal income tax structure with a separate bracket for millionaires
Graduated rate structure for the real estate transfer tax
Refundable Child Tax Credit (CTC) for young children
Refundable Earned Income Tax Credit (EITC)
Refundable dependent care tax credit
Sales tax base excludes groceries
Levies a tax on inheritances
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Comparatively high reliance on property taxes
Does not levy a tax on estates
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