Looking forward to my tax relief in New Jersey 🙂 What a joke. A 1% increase in sales tax is now the great hope to lower my property tax in New Jersey. This is Jon Corzine’s master plan, it is hard to believe that he was the Chairman and CEO of Goldman Sachs from 1994 to 1999. Lets just do some simple math, to lower taxes an average of $1000.00 a year per NJ resident (sounds like a number that would get me excited) working with a .01 (1% tax increase) increase per dollar in sales tax the state would have to generate an average of $100,000.00 in revenue on sales taxable items. Is it me or does this seem ludicrous? Let assume the state does a phenomenal job investing (note this oxymoronic statement, when was the last time the local, state or federal government did a phenomenal job investing?) and this is a multi-year plan I would still rather have my 1% back.
It is also my understanding that only a portion of the 1% is going toward property tax breaks, some portion will be going towards the already depleted state workers pension fund (another fine example of the state government investing geniuses at work).
Some tax facts about the state of New Jersey before we get to my conclusion.
New Jersey is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. New Jersey’s localities collected $18,225,594,000 in property taxes in fiscal year 2004, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, New Jersey collected $3,660,000 in property taxes during FY 2004, making its combined state/local property taxes $18,229,254,000. At $2,099, New Jersey’s combined per capita collections were the highest in the nation.
Estimated at 10.8% of income, New Jersey?s state/local tax burden percentage ranks 17th highest nationally, above the national average of 10.6%. New Jersey tax payers pay $5,234 per-capita in state and local taxes.
New Jersey?s personal income tax system consists of six brackets and a top rate of 8.97% kicking in at an income level of $500,000. Among states levying personal income taxes, New Jersey?s top rate ranks 6th highest nationally. New Jersey’s 2004 individual income tax collections were $852 per person,
New Jersey levies a 6% general sales or use tax on consumers, which is above the national median of 5%. State and local governments combined collect approximately $721 per capita in general sales taxes, ranking 31st highest nationally. New Jersey?s gasoline tax stands at 14.5 cents per gallon and ranks 4th lowest nationally. New Jersey’s cigarette tax stands at $2.40 per pack of twenty and ranks 2nd highest nationally. The sales tax was adopted in 1966, the gasoline tax in 1927 and the cigarette tax in 1948.
So at $721 per capita that put the per capita revenue at $12,016.66. Assuming the entire 1% tax increase was going to lower property taxes this would yield a potential reduction of $120.16 which I guess if you apply that to the average state/local property taxes of $2,099.00 would be a 5.7% reduction.
I won’t hold my breath from my property tax decrease. But maybe I should stop avoiding the guy walking around my neighborhood reassessing the homes, maybe I have it all wrong and he looking to lower my taxes. Sure he is! I would like to see a little more detail on this plan, right now I am less than excited.