Friday, October 24, 2014
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Lesniak Urges Income Tax Hike, Estate Tax Cut For Wealthy

Two days after Gov. Chris Christie chided Democrats for failing to come up with any budget alternatives, state Sen. Raymond Lesniak (D-Union) yesterday unveiled an ambitious proposal to raise income taxes on New Jerseyans earning over $350,000, eliminate the estate tax, and generate the $850 million needed to put the state back on track to pay off its unfunded pension liability.

Lesniak Urges Income Tax Hike, Estate Tax Cut For Wealthy

State Sen. Raymond Lesniak (Mel Evans/AP)
State Sen. Raymond Lesniak (Mel Evans/AP)

Two days after Gov. Chris Christie chided Democrats for failing to come up with any budget alternatives, state Sen. Raymond Lesniak (D-Union) yesterday unveiled an ambitious proposal to raise income taxes on New Jerseyans earning over $350,000, eliminate the estate tax, and generate the $850 million needed to put the state back on track to pay off its unfunded pension liability.

Christie already has vetoed three previous attempts by Democrats to reimpose higher income tax rates on wealthier New Jerseyans and vowed this spring to do so again. For Christie, Lesniak’s insertion of a $350 million estate tax repeal as a sweetener for Republicans does not change the fact that the $1.2 billion income tax hike that is its centerpiece is the most ambitious “millionaire’s tax” proposed so far.

Lesniak’s proposal would permanently restore former Democratic Gov. Jon Corzine’s 2009 top rate of 10.75 percent for millionaires and a 10.25 percent rate on earnings over $500,000. And while Corzine’s 8 percent tax bracket applied only to income over $400,000, Lesniak’s 8 percent bracket would kick in at $350,000.

While more than a dozen states have raised income tax rates in recent years, Lesniak’s plan would vault New Jersey past Oregon, Minnesota, Iowa, and Vermont into third place behind only California and Hawaii in income taxes on the wealthy -- although New Jersey’s tax rate would still be lower than the combined New York City and New York State taxes paid by those working in Gotham, a NJ Spotlight analysis showed.

Nevertheless, the legislation proposed by Lesniak -- who is not only one of the state’s most powerful Democratic Party leaders, but also one of the state’s most thoughtful and creative lawmakers -- is an important step in the state’s current fiscal crisis both for what it does and does not do.

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