Millionaire’s Tax Hike a Good Strategy, Says Political Expert [AUDIO]
The upside for the Assembly Democrats who are pushing a millionaire's tax hike is tremendous according to one political expert. Fairleigh Dickinson University political science professor Peter Woolley says the only true downside is that Governor Chris Christie would veto it.
"If you force Christie to make any kind of a tax hike, if you could possibly persuade him even if it's one penny of gas tax it doesn't matter," says Woolley. "He loses and you win. He would never again be able to make the claim that he held down taxes. They would always say he went back on his promise."
Woolley explains, "The other game of course is to set themselves up as the real protectors of the middle class. That means that you have to tax somebody else. It's a good strategy for the Democrats. They can't lose except for the fact that Christie will never agree with them."
The Assembly Democrats proposal would provide a property tax relief credit through the gross income tax return, for all residential homeowners with incomes up to $250,000 in the amount of 20% of the first $10,000 in property taxes paid.
To pay for the new revenue needed for the property tax relief under the Assembly Democrats' plan, the state's income tax rate for those earning more than $1 million would be increased beginning next fiscal year. The rate would go from 8.97 percent to 10.75 percent. This would impact about 16,000 out of about 2.6 million filers and raise $800 million at the plan's full implementation in fiscal year 2016. And, that's where the problem lies because Christie hasn't been shy about his thoughts on that particular tax increase.
In his budget message, the Governor said, "We have eliminated the special surtax that for a time gave New Jersey the highest marginal tax rate in the nation - and I am proud to have twice vetoed the effort to re-introduce it. And just so there is no mistake in my intention: I will veto any tax increase again."
Assembly Democratic Leader Lou Greenwald says, "Over 70% of the state supports the millionaires tax. The Governor isn't always wrong, but when he is wrong I'm not going to not act and not follow the beliefs of my party and myself just because he's in disagreement."
The Assembly Democrats' plan would be phased-in over four years - just as the Governor's plan - but relief would begin immediately, with the first year providing a credit of 20 percent of the first $5,000 in property taxes paid. Under the plan, there would be no statutory change to the existing property tax rebate/credit program, but homeowners qualifying for the property tax relief credit would receive the larger of the two. The Senior Freeze property tax relief program would remain in place.
Christie says, "All I can you is that Assemblyman Greenwald's tax increase plan is dead and he knows it."