New Jersey Gov. Chris Christie (R) is reviving a once-failed income tax plan that will give a 10 percent tax cut to all of the state’s residents but will grant more of its benefits to the wealthiest New Jerseyans. Christie pitched a similar plan in 2012, but it failed at the hands of Democrats in the state senate when the state’s revenue levels fell far short of projections.
State revenues are healthier now, however, and Christie is using that to justify the plan’s revival, Bloomberg reports:
Homeowners earning $400,000 or less would get an income-tax credit equal to 10 percent of their property taxes, capped at $10,000 and phased in over four years. The governor made his proposal a condition of his increasing a separate tax credit for low and middle-income workers. […]
“The big excuse for not doing this before was they weren’t sure if we had the revenue,” Christie said. “Four months in a row we’ve exceeded our projections on revenue, and the economy’s really starting to come back here in New Jersey.”
Revenues for the current year are less than one percent above projections, according to the state treasurer, after they rebounded at the end of 2012. But even if revenue levels are in a better position, Christie’s tax cut would still aim most of its benefits at the wealthy. While Christie touts the plan as giving an average tax cut of $775, the similar 2012 version would have given just $80 to a family making $50,000, roughly the median American income. The wealthiest 1 percent of New Jersey taxpayers, meanwhile, would receive 40 percent of the total tax cut, with millionaires saving roughly $7,200 a year.
New Jersey’s tax code is already skewed toward the wealthy, according to the Institute on Taxation and Economic Policy, which found that the bottom 20 percent of New Jersey taxpayers pay an average of 11.2 percent of their income in taxes. The top 1 percent, meanwhile, pay just 7 percent of their income in taxes each year.