Group Seeks $972 Million Tax Hike For State's Wealthy

The Express-Times — Thursday, March 27, 2003

The Express-Times

TRENTON — A coalition of activists called Tuesday for a $972 million state income tax increase for the wealthy.

Group members said the move would be a matter of fairness for the middle class and the poor, who they said suffer the most under cuts Gov. James E. McGreevey has proposed to grapple with a $5 billion budget shortfall. Among the more contested aspects of McGreevey's budget are cuts to state-funded dental care for low-income families, senior drug coverage and frozen property tax rebates.

"The people who would pay this tax increase are far and away the people who got the most from federal and state tax cuts to date," said Jon Shure, director of New Jersey Policy Perspective. "Even the wealthiest people in New Jersey would still be paying less than if the Bush and Whitman tax cuts never happened."

Shure was a Cabinet member under Gov. James Florio, the Democrat who raised state income taxes by $2.8 billion in 1990.

Assemblyman Michael Doherty, R-Warren/Hunterdon, disagreed with Shure's proposal.

"I am absolutely opposed to higher taxes in any form," he said. "The top 5 percent of wage earners in the United States are paying over 50 percent of the taxes. We need to stop looking for new sources of revenue and control spending,"

"The top wage earners are already bearing a very high burden to support government." Doherty added.

The Fairness Alliance, the group calling for the hikes, consists of 79 organizations, ranging from liberal think-tank Policy Perspective to the New Jersey Education Association, the statewide teachers' union.

All members denied being prodded by any lawmakers, many of whom in recent months have begun looking to the so-called "silk stocking tax" as a way to cover the state's deficit without wholesale cuts in services.

"The budget which the governor presented to the state is one which will drastically impact families, children and seniors," said Reginald T. Jackson, director of the Black Ministers' Council of New Jersey. "It's a budget that will inflict unbearable pain ... it's an unjust budget."

The plan to head off the budget crunch calls for an increase for the top 2 percent – 50,000 households – of New Jersey's wage earners while expanding exemptions for low-income taxpayers.

Referring to the flush 1990s, the group calls the initiative the "Recapture the Windfall" campaign.

The top tax rate is currently 6.37 percent.

According to the Alliance, households earning $400,000 would see that rate jump to 7.5 percent. At $600,000 and $1 million it would go to 8.5 percent and 9.5 percent, respectively.

For individuals, the higher rates would take effect at $250,000, $300,000 and $500,000.

McGreevey's office ruled out the program.

"We understand their concerns and goals. But the governor has made it clear that we will not raise sales, income or business taxes," spokesman Micah Rasmussen said. "We are in tough economic times and the last thing state government should do is make it worse."

He said McGreevey would veto any legislation calling for the increase. Assemblyman George Geist, R-Washington Township, said he would not support any new taxes.

Geist called for re-examining funding for the state's 31 poorest school districts and putting much of it into suburban schools. McGreevey has proposed a $200 million increase in school funding in the current year with only $50 million of it earmarked for tax relief in suburban districts.

Shure is the "kiss of death" in state politics," Geist said.

"He has a liberal think tank that is financed by liberal think-tankers that put New Jersey in the tank. Jon Shure is the kiss of death for any policy," Geist said. The tax proposal "is dead on arrival. There is no support for it."

Among the more substantial aspects of McGreevey's budget:

His plan calls for instituting an assets test that would bar many from the program, which offers prescriptions for a $5 co-pay. Those displaced would be transferred to the less-generous Senior Gold program.

McGreevey cut the grants last year from $20 million the previous year.

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