From the Home News Tribune:
Group calls for income-tax hike to lower property taxes
New Jersey’s income tax should be relied on more as the state looks to cut the nation’s highest property taxes, a liberal-leaning policy group said yesterday as it sought to help shape the ongoing property tax reform debate.
New Jersey Policy Perspective recommended reworking the state income tax to reap another $1 billion per year from the levy.
Shure said the proposals — which would involve increasing taxes on those earning from $250,000 to $500,000 per year and taxing all 401(k) retirement account contributions — would help cut the state’s heavy reliance on property taxes to pay for local government.
Legislators considered increasing income to help solve a $4.5 billion budget deficit last summer, and the idea has popped up during property tax reform talks, but Gov. Jon S. Corzine has repeatedly expressed concern about increasing income taxes.
“It’s the fairest tax we have in New Jersey,” said NJPP President Jon Shure.
The income tax is expected to raise about $11.6 billion this fiscal year, but 42 percent of the money is paid by the wealthiest 1 percent of taxpayers. Corzine and others fear that if the income tax was raised those people may leave the state.
Corzine also fears that relying too much on the income tax leaves the state vulnerable to economic downturns that cut into taxpayer earnings.
But Shure said the fact that wealthy taxpayers pay most income taxes proves the tax is working because the tax is supposed to be based on a person’s ability to pay.
I have always voted democrat in presidential elections…please, please, please liberals, get a new schtick…this income tax raising stuff is old. going after the rich because they are rich is a played out strategy. it’s hard enough for the young in this nation to live as well our parents did on similar inflation-adjusted incomes.
how about cutting gov spending and increasing integrity of bank loans and appraisals so that housing prices aren’t inflated?
the problem is that housing prices are too high, and property taxes are a symptom of the problem. increasing income taxes doesn’t address the real problem.
this isn’t reform, it’s robbing peter instead of paul. how about some actual reform like consolidation of services and productivity improvements. simply pathetic.
This is exactly what I fear about the school district consolidation proposal: it wouldn’t be long before they’re consolidating the whole state and what better way to pay for it than income taxes? In order to eliminate redundancies that don’t really add a lot to my tax bill, I would wind up paying for the state to bring every student up to the almost $16,000 per year it costs per student at Hunterdon Central High School.
“… taxing all 401(k) retirement account contributions”
Are they kidding? You can’t suggest taxing 401(k) money without indicating the specifics. They can’t mean a pure tax on retirement savings? If you tax my 401(k), how will I have any money left to fund the underfunded teacher’s pension plans?
From the start an income tax increase was going to be part of this.
Taxing the 401K contributions is a non-starter. Actually, it’s totally nuts, but non-starter sounds more restrained and reasonable.
The hammer has to drop on small towns and efficiency, but even that won’t help some of the worst property tax towns, in fact it will probably make them comparatively worse, but I don’t think there is a way around that.
If the state actually wants to do something it should legislate every town with fewer than 10K residents out of existence. Maybe even 15K. Any school district with less than 300 students (maybe more) needs to be eliminated as well.
You can cut and consolidate without merging towns. You should start with 911, emergency services, and education costs.
The real key needs to be reducing costs. Everything else is just lip service.
taxing all 401(k) retirement account contributions – I wonder how do they avoid double taxation in this case??
New Jersey currently taxes the Federal Thrift Savings Plan: it is the same as a 401(k)in being a tax deferred benefit plan, but is authorized under 401(a).
Federal employees living in New Jersey pay NJ income tax, but not federal income tax, on their retirement contributions. NJ essentially requires a payment on funds that are not available to the employee in the year taxed.
Presumably a tax on 401(k) contributions would be treated the same way.
I don’t know you people live in that bottomless money pit of a state.
Well if they do start taxing 401K I think I will move out – hell it’s not like I have a house to sell…..
Gov. Jon S. Corzine has repeatedly expressed concern about increasing income taxes, does that mean the govenor is going to leave the state? I sure hope so…..