WNYC's Bob Hennelly is an award-winning investigative journalist. While at WNYC he has reported on a wide gamut of major public policy questions ranging from immigration and homeland security to power outages and utility mergers.
NJ Voters Face 3 Different Tax Cut Plans
Friday, March 09, 2012
Governor Chris Christie used his budget address last month to surprise his Democratic colleagues, with a call for a ten percent, across the board, income tax cut to be phased in over three years.
Christie's enthusiasm for tax cutting appears to have spread in Trenton. The two Democratic-controlled chambers of the legislature have their own tax cutting plans, one championed by Senate President Stephen Sweeney, the other by Assembly Majority Leader Lou Greenwald.
Both Sweeney and Greenwald's plans pin their tax relief to property tax cuts that would come in the form of tax credits for homeowners on their state income tax. While both proposals limit the cuts to households that make $250,000 or less, Sweeney's credit give homeowners income tax credit equal to 10 percent of what they pay in property taxes.
"This is simple. You make 'x' amount and your property tax is 'x' amount. We are going to save you ten percent on your property tax by giving you a credit of you income tax, "Sweeney said.
Greenwald's plan plugs in a 20 percent credit, but partly funds the higher cut with a millionaires' tax.
Governor Christie has vetoed the millionaires’ tax in the past and has unequivocally vowed to do so again. Senate President Sweeney thinks his alternative is the most viable because it does not come with the deal killing millionaires’ tax.
Sweeney says with the state's unemployment still stuck at a stubborn 9 percent and the foreclosure crisis still very much in evidence the state has to get quick relief to the most financially stressed households as quickly as possible.
"So the middle class people are going to see the benefit because this help is important to everyone who is struggling check to check," Sweeney said. "This additional funding can go back into the economy which you know with wealthy people get tax cuts they normally put it in the bank. You know the middle class people their spending it and that is the benefit of when you do cut taxes."
Assembly Majority Greenwald has not thrown in the towel when it comes to the millionaires’ tax. It’s a discussion, he says, he wants to have.
“Our plan would impose a tax on the wealthiest 1 percent and it would use that money as New Jersey has talked about for years to give direct relief back to property tax payers and work for the benefit of 95-percent of the households in the state of New Jersey,” Greenwald explained.
Peter Woolley, executive director of Fairleigh Dickinson University's Public Mind Poll, says no matter what the final tax cut looks like Governor Christie can take credit for reframing the debate.
"Christie has moved the conversation. The conversation for a couple of years has been about raising taxes specifically on millionaires. By introducing this income tax cut, Christie has basically changed the conversation from raising taxes to how are we going to cut them," Woolley said.
But Assembly Speaker Greenwald believes his party should keep hammering home the issue of the wealthiest paying more, which he thinks could be a strong for Democrats in November.
Christie and the Democrats have until the end of June to find common ground as part of passing next year's budget.