STATE – New Jersey could cut property taxes by more than a third if it revamped its income tax system, according to a proposal from the New Jersey State League of Municipalities’ Property Tax Reform Task Force, but don’t expect any action on the plan in Trenton.
Republican Gov. Chris Christie dismissed the report without reading it. “I don’t think I’ve gotten a copy of the report yet, but when I do, I’m going to throw it in the garbage can where it belongs,” he said at a press conference last week.
The proposal would reduce the state’s reliance on property tax, which is regressive, and increase the revenue derived from income tax, which is based on the ability to pay.
Under the plan, the state would tax a person’s full income at their highest bracket rate instead of the current system which charges a 1.4 percent tax on the first $20,000, a 1.75 percent tax on the next $30,000, and so on through the different brackets. A person who earns $70,000 pays $1,254 in income tax under the current system, but would pay $461 more under the proposal.
That revenue would allow a 35 percent reduction in property taxes, allowing the average New Jersey homeowner to save an estimated $2,700 on a property tax bill that is now $7,700.
According to the report’s authors, only New Hampshire relies more heavily on real estate tax levies to fund local government services. Fifteen New Jersey counties rank in the top 25 in the country in property taxes, and the state’s property taxes are higher than income, sales and corporate taxes combined.
If lawmakers do not act to reduce property taxes, reform could still be accomplished through a constitutional convention.
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