Seniors, Middle-Class Families Set to See Taxes Rise Nearly $1,300 While Millionaires Would Save $11,500
TRENTON – A nonpartisan analysis of Governor Chris Christie’s budget shows conclusively that the proposal would benefit New Jersey’s wealthiest families at the expense of senior citizens, lower-income working families and the middle-class, Senate President Stephen M. Sweeney said today.
Sweeney asked the Office of Legislative Services to calculate the tax burdens under the Christie proposal for hypothetical families at different income levels. The analysis found that seniors on fixed incomes would see their taxes rise by more than $1,300, while a family making $1.2 million annually would save more than $11,500.
“The Governor keeps talking about a budget based on the concept of ‘shared sacrifice,’” said Sweeney (D-Gloucester/Cumberland/Salem). “But this analysis proves what Democrats have been saying throughout this process: The sacrifices in this budget are being made solely by the families who can least afford them.”
The OLS analysis calculated the tax impact on a series of six hypothetical families: a retired couple making $40,000 and families of four at the $40,000, $75,000, $200,000, $500,000 and $1.2 million income levels. The tax analysis took into account changes in the gross income tax, earned-income tax credit, a four-percent increase in property taxes and the loss of Homestead Rebates.
OLS found the retired couple would pay an additional $1,320 in taxes, seeing their total tax burden increase by more than three percent. Sweeney noted that the OLS analysis did not take into account changes to the state’s prescription-drug programs that would raise co-pays on seniors and implement a new $310 deductible – changes that would cost them hundreds more dollars over the year.
“Once everything is added up, the average senior couple could see nearly $2,000 in higher taxes and prescription drug costs,” said Majority Leader Barbara Buono (D-Middlesex). “That’s a horrible way for a state to treat its senior citizens.”
A family of four with a total income of $75,000 would see its total tax liability increase by $1,293, and families making $200,000 would experience a $337 increase in taxes.
On the other end of the spectrum, a family with total income of $500,000 would save $1,586 under Christie’s proposal and a family making $1.2 million would save $11,598.
“It’s hard to argue with the numbers,” said Sweeney. “Under this budget, New Jersey’s middle-class families and seniors would experience a crushing increase in taxes while the richest one-percent would get a free ride. That is not shared sacrifice. It’s not even close.”
Even with the imposition of a 2.5 percent cap on local property taxes, upper income families would still win big, the OLS analysis shows. Families making up to $200,000 would still see their taxes go up (though by roughly $120 less) while families making over $500,000 would still see their taxes go down by several hundred dollars more.
“Even with the centerpiece of the Governor’s proposed ‘tool box’ – which wouldn’t even be in effect until next year at the earliest – New Jersey’s working families would still see their taxes rise,” said Sweeney. “It is more apparent than ever that the Governor has loaded this budget with as many bright, shiny objects and buzzwords as possible in the hopes of distracting residents from the simple fact that the richest are going to get a huge tax cut at the expense of everyone else.”
Click here to review the OLS analysis of the impact on taxpayers of the Governor’s FY 2011 proposed budget..