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Sweeney Introduces Legislation To Cut Income Taxes For Seniors, Retirees

Members of legislative leadership listen and prepare to answer reporters' questions about how reinstating the millionaire's tax would raise more than $620 million this year.

Says Group More Deserving of Help Than Millionaires Favored By Christie

TRENTON – Senate President Stephen M. Sweeney has formally introduced legislation to provide New Jersey’s middle-class senior citizens and retirees with an income tax cut, allowing them to remain in New Jersey amidst the tide of rising property taxes.

Sweeney contrasted his proposal to one previously announced by Governor Christie, who said his goal was to cut income taxes for the highest-paid residents by one-third.

“Instead of simply letting the rich get richer in the hopes it will trickle down, we should be allowing seniors and retirees to keep money in their pockets so they can afford to stay in New Jersey,” said Sweeney (D-Gloucester/Cumberland/Salem). “Allowing them to stay here for the long-term instead of taking their retirement savings elsewhere will benefit our economy far more than another tax break for the rich.”

Under the Sweeney bill (S-2345), seniors whose total earnings fall under $100,000 would be exempt from paying taxes on any income from a pension or deferred compensation plan. The change would put New Jersey on par with Pennsylvania, which is one of only three states (with Illinois and Mississippi) to have a similar retirement income tax exemption.

Sweeney noted that the Governor’s proposed income tax cut for the rich also was made under the guise of putting New Jersey on the same footing as Pennsylvania. However, Sweeney said that instead of simply trying to attract more millionaires to the state, New Jersey should focus on helping middle-class retirees stay in their hometowns.

According to data from the state Division of Taxation, state tax returns show the number of filers with incomes of more than $500,000 increased by nearly 80 percent from 2003 to 2007 – the year’s following the implementation of the current tax rate on high incomes. Since 1998, the number of such filers has more than doubled.

“Seniors who can stay in New Jersey will continue to shop in their towns and help stabilize their local economies,” said Sweeney. “Seniors who have spent years in their homes are the bedrock of their communities and local economies. We should be doing what we can to protect them before trying to make New Jersey a haven for millionaires.”

The plan marks the second time this year that Sweeney has stepped up with a proposal to help New Jersey’s seniors stay in their homes. This spring, he sponsored legislation to reinstate an expired income tax surcharge on earners with incomes over $1 million to provide direct property tax relief to senior homeowners. Within minutes of the bill’s passage by the Legislature, the Governor vetoed it.

Sweeney said his proposed tax cut, unlike the Governor’s, would work to close the ever-widening gap between the richest residents and the rest of society. He said that unless steps are taken to help middle-class residents, income inequality will only worsen.

“The Governor already has one strike against him when it comes to protecting New Jersey’s seniors,” said Sweeney, referring to the Governor’s veto. “It’s very telling when the Governor puts a premium on helping the rich to get richer, rather than allowing seniors to afford to stay in New Jersey.”

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