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Higher Tax Urged For Wealthy

Home News Tribune — Thursday, April 24, 2003

By MICHAEL SYMONS
GANNETT STATE BUREAU

TRENTON — A handful of well-to-do New Jerseyans yesterday joined a coalition of about 90 groups urging the state to raise income taxes for the 50,000 wealthiest households in the state to avoid deep budget cuts and widespread increases in property taxes.

The groups call themselves the Fairness Alliance, and they want lawmakers to create three new tax brackets that would affect family income above $400,000, $600,000 and $1 million. The rates would last three years, affect 2 percent of households and raise $972 million a year.

A few wealthy residents, including Jaws author Peter Benchley of Princeton Borough, are volunteering to pay those higher taxes, in the latest step in the coalition's campaign to convince state officials to hike income taxes for the wealthy.

"I want to live in a civilized state, and no matter how low my taxes are, I cannot do it myself," said Rutgers University business professor Michael Rothkopf of Piscataway. "I want to live in a state that can educate its citizens and take care of its poor."

Bruce Coe, a former president of the New Jersey Business & Industry Association, said taxpayers in all brackets would still gain financially – after deducting state taxes from federal returns, for the most wealthy – because of President Bush's proposed tax cuts.

"Think of it as revenue sharing, federal revenue sharing," said Coe, a Lambertville resident. "It's the best deal New Jersey could ever get. We're not getting back 67 cents on the dollar. It's free."

Most Republicans have argued against raising income taxes, and Democratic Gov. James E. McGreevey has repeatedly said he opposes increasing income- or sales-tax rates.

Americans for Tax Reform, a Washington group opposed to all tax hikes, says an increase in New Jersey income taxes would be a tax hike on small business, as nearly 73 percent of filers making $250,000 are actually S corporations, limited liability companies or partnerships.

Currently, the top tax rate is 6.375 percent. The new rates would be 7.5 percent, 8.5 percent and 9.5 percent. For individual taxpayers, the rates would apply at $250,000, $300,000 and $500,000, according to the Fairness Alliance proposal.

The group also wants to end income taxes for 232,000 taxpayers – families with incomes of $20,000 to $25,000 and individuals with incomes of $10,000 to $15,000 – that make too much money to be exempt under current rules. This would cost the state $42 million.

"The money will mean something to them, and it doesn't mean a darn thing to me," said Herbert Greenberg of Princeton Township, the president and chief executive officer of Caliper Human Strategies, who said the changes wouldn't affect how much money he spends.

Personal income grew faster in New Jersey in 2002 than the national average, according to estimates issued yesterday by the U.S. Bureau of Economic Analysis. Income grew 3.1 percent to nearly $339 billion, compared with a national growth rate of 2.8 percent.

Per capita income in New Jersey was estimated at $39,453, second highest in the nation.

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