NJ Property Tax

[Pat McCotter]

TRENTON - New Jersey has a host of issues to tackle in the year ahead, but none so pressing as finishing the job of reducing the nation's highest property taxes, Gov. Corzine declared [Jan 9, 2007] during his State of the State speech.

Didn't they institute an income tax to get rid of the highest property tax in the country?

[Pat McCotter]

[NOTE: Make sure you are next to a bucket when you read this.]
[Click the link for the complete article...or not.]

IF IT AIN'T BROKE...
New Jersey's Income Tax
Makes Dollars and Sense
By Mary E. Forsberg
OCTOBER 2006

FORWARD
Most people probably would agree that we need taxes at some level to pay for the things we want government to do. We could disagree on what to tax, how much and who-not to mention how best to use the money raised through taxes. But there is enough common ground for a reasoned discussion of such issues. There probably is little point in having an argument over whether taxes are "good" or "bad." Those who would oversimplify matters to that extent are unlikely to bring many more over to their side. The reality is that taxes are a tool; like any tool they need to be used wisely.

That said, New Jersey's tax structure is an unqualified mess. The state relies far too heavily on local property taxes, a levy based on the value of someone's home and land and often unrelated to actual ability to pay. Attempts over the years to put the system into better balance have sometimes made progress. But they also have foundered on political rocks and other times been reversed in favor of short-term fixes with unfortunate long-term consequences.

It's time to get serious. And maybe that is happening. As this was written, the Legislature was meeting in special session, having been directed by Gov. Jon S. Corzine to fundamentally reshape the ways New Jersey handles its finances. It is our hope that this report will become part of the debate, indeed that it will help to shape the debate so that progressive principles can guide the path to a new New Jersey when it comes to economic justice and investing in the future.

Simply put, the state income tax must continue to play an important role in New Jersey's overall tax system. It is a fair tax, and can be made more so. It is a productive tax, and can be made more so. But it also is a tax that often is misunderstood and misrepresented. There is much that needs to be explained and clarified about a levy that began 30 years ago and without which New Jersey would surely be in even worse shape than it is today.

Over its nine years of existence, New Jersey Policy Perspective has written extensively about taxes in New Jersey and how to devise a structure that works best for the most people while providing enough money for what needs to be done. Much of this work was done by Research Director Mary E. Forsberg, who came to NJPP five years ago after 14 years with the state Office of Legislative Services. Earlier this year, she wrote a report on the state sales tax to which this report on the state income tax serves as a companion. Together, along with other work over the years, they put New Jersey's revenue-raising system in what we believe is helpful perspective.

[AlexLibman]

It's a damn shame that I'm stuck in New Jersey for 1-2 more years, for a whole long list of reasons.  But I haven't paid taxes in years.   

[Pat McCotter]

[NOTE: Had to add the Sales Tax to this subject]
[Again, there is more fun at the link. Don't forget to clean the bucket before reading this.]

YOU'RE 40;
NOW GET TO WORK:
Making the State Sales Tax Pull its Weight
By Mary E. Forsberg
June 2006
HAPPY BIRTHDAY

In many ways, modern New Jersey first started to take shape in 1966-and it took a tax to make things happen.  The state sales tax as it exists today began in that year, giving New Jersey for the first time enough resources to help make a truly positive difference in the lives of its citizens.  One of the initial impacts of the new revenue stream was expansion of the state college system, opening the doors of in-state higher education to many more New Jerseyans than ever had the chance before.

Before 1966, the only taxes that individuals in New Jersey paid to the state were on the purchase of gasoline, tobacco products and alcoholic beverages.  Yes, it was cheaper.  But, arguably, people got what they paid for.  New Jersey today is a different place, a better place.  Now, as the sales tax marks its 40th birthday, it is time to ask some important questions of this levy.  Is it doing all it can to support the needs of 21st century New Jersey? Is it in step with the times or stuck in the past? Is the tax as fair as it could be?

This report addresses those and other questions.  It offers a contemporary look at a middle-aged tax, in the larger context of how New Jersey can meet its short- and long- term revenue needs and serve the people who live and work in the state.

SALES TAX BASICS

In most of the United States, when someone buys something, a few cents per dollar are added to the price and sent to the government to pay for various programs and services. This is a sales tax: a tax on a transaction.  In many instances, the tax is hardly noticed, if at all.  Other times it can be the focus of considerable resentment.  But, over the years, sales taxes have come to be hardy, reliable-and crucial-sources of revenue for the jurisdictions that levy them.

And almost every state does levy them.  The five exceptions are Alaska, Delaware, Montana, New Hampshire and Oregon.  Additionally, in 35 states, counties and municipalities can levy sales taxes.  New Jersey is not one of them.

There are two types of sales taxes: general and excise.  The general sales tax applies to a broadly-defined base: consumer purchases of goods and also services-like buying a television or renting a car-at the retail level. Excise taxes are imposed on specific items, usually gasoline, alcohol and tobacco (giving them the nickname of "sin taxes"). While people with no or very little income pay no income tax, it can safely be said that everyone pays sales taxes.

Of the $650 billion that state governments collected last year from all sources, 34 percent came from personal income taxes, 33 percent from sales taxes and 15 percent from excise taxes. (See Table 1.)  As a percent of total taxes, Vermont relied least (14 percent) on sales taxes while Washington relied most (62 percent).  Of the states that levy little or no income tax, six (Florida, Nevada, South Dakota, Tennessee, Texas and Washington) collect more than 75 percent of their revenue from a combination of sales and excise taxes.

New Jersey's reliance on general sales taxes is, at 29 percent of total revenue, below the national average.  The state is, at 16 percent, slightly above the national average for excise taxation.

The sales tax may be calculated as a percentage of sales price (say 6 percent on a $10 purchase) or on a fixed amount per unit of product (6 percent on a gallon of gasoline or $2.05 on a pack of cigarettes).  The first is a tax on value; the second is a tax on quantity.

[eques]

I escaped from NJ... of course, I'm having a hell of a time now (not in a good way), but it'll be better in a few months.

The biggest reason I left NJ was because Corzine and his "special legislature" were raising just about every tax they could find and even creating new taxes.

Even though I'm struggling right now, at least I'm not funding NJ directly anymore.

[KurtDaBear]

[NOTE: Make sure you are next to a bucket when you read this.]
[Click the link for the complete article...or not.]

IF IT AIN'T BROKE...
New Jersey's Income Tax
Makes Dollars and Sense
By Mary E. Forsberg
OCTOBER 2006

FORWARD
Most people probably would agree that we need taxes at some level to pay for the things we want government to do. We could disagree on what to tax, how much and who-not to mention how best to use the money raised through taxes. But there is enough common ground for a reasoned discussion of such issues. There probably is little point in having an argument over whether taxes are "good" or "bad." Those who would oversimplify matters to that extent are unlikely to bring many more over to their side. The reality is that taxes are a tool; like any tool they need to be used wisely.

The telling point here is that the author skips right past her first sentence and rushes to declare: We might "disagree on what to tax," but have "common ground for a reasoned discussion."  It apparently never occurs to her that anyone might want to have a "reasoned discussion" of "the things we want government to do." 
In my case, which I'm sure is the same as most others on this forum, I want government to do as little as possible (with "possible" defined as practically nothing) and that's the point that the socialists will never get:  If government is doing very little, it costs very little and irritates the citizenry very little.