Democrats Propose Tax Hike On Those Making More Than $1M

million dollarsTop Democratic lawmakers today proposed raising taxes on so-called true millionaires — those making more than $1 million a year — to pay for restored senior property tax rebates and prescription drug benefits. Democratic legislators, led during a Statehouse news conference by Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Sheila Oliver (D-Essex), said the tax increase would apply to about 16,000 New Jersey residents. “When the governor talks about shared sacrifice I think we all get it, and we all agree,” said Sweeney. “But shared sacrifice means 100 percent of us share in the sacrifice, not 99 percent.”

The plan challenged Republican Gov. Chris Christie’s pledge against raising taxes in the budget for the fiscal year that starts in July. Christie has argued that a repeat of last year’s income tax surcharge — which affected those with incomes over $400,000 — would hurt small business owners and slow economic growth.

Christie immediately rejected the Democrats’ proposal, accusing them of trying to “pander” to senior citizens with a one-year fix that will harm the state’s broader economy. He repeated his vow to veto any tax increase, and characterized the dispute as a “philosophical difference” between himself and foes who want a bigger government.

The governor questioned how lawmakers proposed to raise the same amount of revenue from 16,000 taxpayers that had previously been raised from 63,000 people.

“It’s a cute idea, but their math doesn’t work,” Christie said.

He spoke at a news conference where he introduced a 33-bill package of reforms, including a constitutional amendment capping property tax hikes at 2.5 percent. The only exceptions would be for towns’ debt service or if local voters decide to override the cap. Contract awards for public workers like police, firefighters and teachers — including salaries, health benefits, vacation time and other perks — also could not increase by more than 2.5 percent a year.

Those changes — which would require legislative approval — would truly make a difference for senior citizens who want an affordable state, Christie said.

Democrats said the tax would generate more than $620 million, enough to pay to maintain last year’s level of senior rebates and put back prescription drug funding Christie would eliminate. Christie has proposed raising the co-pay for brand-name prescription drugs from $7 to $15, as well as charging a new $310 annual deductible.

“A tax on less than a half percent of the taxpaying New Jerseyans is not a broad-based tax,” said Senate Majority Leader Barbara Buono (D-Middlesex). “The governor’s refusal to agree to reinstate the millionaire’s tax will guarantee that more seniors and the disabled – that thousands of seniors and the disabled – will edge over into poverty. That is perverse logic.”

Lawmakers and the governor must approve a budget before July 1. Christie in March proposed a painful $29.3 billion budget that made cuts across almost every aspect of government, including a 75 percent cut to the popular property tax rebate program as well as converting the checks into credits on residents’ bills.

Democrats, who have majorities in both houses of the Legislature, say the governor’s cuts spared the wealthiest residents. Star Ledger

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