State Should Tax Wealthy, Foes Of Federal Cuts Urge

CourierPostOnline — Wednesday, February 26, 2003

Gannett State Bureau

TRENTON — Advocates from a half-dozen groups representing seniors, housing, union and religious interests Tuesday criticized the federal tax cuts proposed by President Bush, and some urged the state to enact higher taxes on the wealthy if those cuts are approved.

Alan Kaufman of the Communications Workers of America union and John Weber of the New Jersey Citizen Action Fair Tax Campaign said the overall bill for well-to-do New Jerseyans would still be lowered if state income taxes were raised while federal taxes fall.

And they said such an approach makes sense because states are picking up an increasing share of the costs for programs they say the federal government isn't adequately funding, such as education and health care for senior citizens and the poor.

"If it's left to the states, ... there are people sitting on tremendous windfalls of money," Kaufman said. "If we don't tap that, then we are going down the drain in 'terms of becoming a humane and democratic society that takes care of people's needs."

"(The wealthy are) still coming out ahead," Weber said.

Weber said the Fair Tax Campaign is preparing a plan that calls for eliminating state income taxes entirely for the poorest New Jersey residents, which he said would stimulate economic growth. Currently the lowest rate is 1.4 percent, paid on income below $20,000.

The top rate is 6.37 percent, paid on income over $75,000 for a single resident and over $150,000 for married filers. Weber said the state could collect $972 million a year more by charging residents higher rates on income of $400,000 or more.

The news conference was organized by Citizen Action, which issued a study from the Institute for America's Future and the Economic Policy Institute that says Bush's proposal would worsen the New Jersey budget deficit $117 million and cost 38,675 jobs over 10 years.

The report said that if Bush's $674 billion tax plan were approved, the wealthiest 1 percent of New Jersey taxpayers would get an average tax cut of $38,236. It said 41 percent of taxpayers in the state would get cuts of less than $100.

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