New Jersey: The State That Taxes The Living And The Dead [AUDIO]
The transfer inheritance tax is one of New Jersey's oldest taxes, dating to 1892.
The 16 percent tax is applied when property is transferred outside the immediate family. Another so-called 'death tax,' known as the estate tax is applied on property valued at more than $675,000. New Jersey is one of 22 states with either kind of death tax, and one of just two states with both.
Assemblyman Ron Dancer has introduced legislation that would repeal the transfer inheritance tax and reduce New Jersey's estate tax to be consistent with federal policy. His bill would completely repeal the transfer inheritance tax and amend the estate tax to increase the filing threshold and exclusion amounts in accordance with the provisions of federal tax law. The law would apply to estates whose owners died after December 31, 2011.
"In New Jersey, one of the nation's worst tax burdens is applied to the living, and the dead," says Dancer. "It's time to bury the death tax…… People should not have to meet with their accountants on the same day they meet with a funeral director."
Dancer's legislation would provide tax relief by revising that $675,000 New Jersey estate tax threshold to the federal level, which is currently $5.1 million.
Dancer explains, "Few states tax estates, fewer have an inheritance tax and New Jersey is just one of two states that has both. We give a whole new meaning to the saying that nothing is certain but death and taxes and for those of us who are left standing, it is death by taxes."
The Assemblyman feels his measure is sound economic policy because the death tax can kill economic growth when applied to small business owners and farmers who may be forced out of business if they can't afford it.