Tell Jim it’s a bad idea
Mc Greevy’s come up with a typical election-year gimmick, the millionaire’s tax”. McGreevy
is asking the Legislature to enact a 2.6 percent millionaire’s tax on income over $500,000. Today, a family earning $550,000 receives a $19,000 windfall from the Bush tax cut. After the millionaire’s tax is paid, they will keep $18,154, for a total cost of $846. No one will see an increase on income below $500,000 – it will impact only 28,500 taxpayers – less than one percent.
I have several questions and observations:
- First of all, this redistribution ploy does NOT address the real issue — which is how is the state going to solve its budget problems. No amount of redistribution will help with that.
- What qualifies as “income”?
Salary? If so, is it on total earnings per household? Conceivably, a family of three professional adults (two employed parents and an employed adult child who’s now living at home having just completed medical school) would qualify as “millionaires” even when, for instance, they might be burdened with onerous student loans for medical school. Or, like several friends of mine, two employed adults taking care of a severely disabled child or parent.
Capital gains on financial investments? The financial industry will suffer.
Estate distributions? If estate distributions, a lower-income family who inherits a house from their recently deceased parents would be subject to this, since the average modest house in NJ can fetch upwards of $500,000.
- The federal tax cut is not a windfall, it is a tax reduction.
- I’ve lived in New Jersey for over 20 years and I have never, ever seen a tax disappear. Instead, the trend is to include more and more people as taxable. Today, $500,000 income, tomorrow, $300,000, and so on until — surprise — the tax man thinks you’re a millionaire.
- McGreevy is proposing other taxes, and in his typical fashion, as Paul Mulshine puts it,
No sooner does James E. McGreevey announce a new tax than he announces that the tax in question will have no measurable effect on anyone — or at least anyone likely to vote for him.
People are not liking it (see the letters titled Cut out the politicians and A break for the masses), since we all realize that Rebates do not now have and never have had anything to do with property tax relief or reform. They are nothing but political pabulum for a political year.
In my prior post I had mentioned the tax brackets for neighboring states. Last evening I was talking to a gentleman who remarked that, with the “millionaire’s tax”, even New York City’s competitive. You know it’s a bad idea when NYC tax rates look good by comparison.
Tell McGreevy you oposse this “millionaires’ tax” by completing his lopsided survey.