Sweeney Says Chris Christie’s Income Tax Cut Is Dead As He Unveils Democrats’ Plan [POLL]
The Democrats have a plan of their own that focuses solely on property tax reduction in the form of credits. Sweeney says the proposal is capped at property taxes paid up to $10,000 and capped at incomes up to $250,000. In other words, those making more than a quarter million dollars annually wouldn't see any tax cut at all under the Democrats' proposal.
"Property tax relief is on its way," proclaims Sweeney. "Income tax cuts to the wealthy are not going to be had in this budget……I am not negotiating an income tax cut. I can tell you that right now."
Sweeney worked on the plan with Assembly Speaker Sheila Oliver and other members of the Democratic leadership team. The Senate President says he plans to present the details of the proposal to the Christie Administration today.
The Christie Administration is projecting revenue growth of 7.3% in the coming year. It is with that revenue that the Administration hopes to fund the first phase of the 10% state income tax cut which is expected to cost $183.3 million in the first year. The legislature would need to approve the tax cut.
"The people have spoken, and they want lower taxes," said Christie in his Budget Address last month. "So in this budget, I have included the proposal I outlined for you a few weeks ago in the State of the State address. I propose to reduce personal income tax rates, across-the-board, for every New Jerseyan, by 10%, and I propose to begin the three-year phase-in of the cut with this budget. A 10% tax cut for every working New Jerseyan will help families to keep more of what they earn. It will make us more competitive with other states and attract more new jobs to New Jersey. Every New Jerseyan deserves a tax cut. Lower tax rates will relieve over- burdened middle class families. They will keep job creators here."
Sweeney says, "Any additional revenue that the Governor's identified and we're recognizing and accepting his numbers, we're putting toward the property taxes where it belongs…..the only difference is rich people aren't going to get any of it….I would hope that he'd work with us to address the tax that's hurting the people in the state which is the highest property taxes in the nation."
The Democrats' plan which would be phased in over four years assumes an annual growth in income tax revenues of 5% over the life of the proposal. Sweeney says the average annual growth in the past 25 years has been 6.1%.
The Governor consistently says it's a sea change just to have Democrats talking about which tax to cut rather than which tax to increase. Christie says that signifies that he's already won the argument.
Democrats agree with Christie that the people of New Jersey want lower taxes. They just think he picked the wrong tax to cut. They feel the focus should be squarely on property taxes. They say the average Jersey resident would be lucky to see $100 in savings from the income tax cut plan while millionaires would receive over $7,000.
The Governor has a valid argument when he says that his budget also helps less wealthy New Jerseyans because he is proposing an increase in the earned Income Tax Credit from 20% to 25% to provide help for New Jersey's working poor.
"Some hard working, low-income New Jerseyans pay no income tax at all," explained Christie last month. "In this budget I am proposing relief for them, too. In 2010, our disastrous budget situation forced us to trim the Earned Income Tax Credit. With this budget, I propose to increase it, from 20% to 25% over the next two years. With my proposed increase, New Jersey will have one of the most generous state tax programs for the working poor in the nation - with an average annual benefit of 550 dollars."