Taxachusetts Has Nothing on New Jersey

New Jersey's fiscal disaster that is the annual state budget is a mess, and the Governor figures the only way to fix the problem is to tax away.

Why?

Is there any reason to make the state even more hostile to businesses and individual taxpayers?

Corzine declined to discuss details but personally told lawmakers Thursday and Friday he plans to raise the sales tax from 6 percent to 7 percent and extend it to several services currently not taxed.

The governor also is expected to recommend a cigarette tax increase of up to 60 cents per pack, impose an unspecified wholesale tax on alcohol and raise the realty transfer tax on commercial property sales.

Administration officials have confirmed Corzine plans to scale back a proposal to more than double the $350 rebate doled out to non-senior homeowners last year and instead will seek only a 10 percent increase for all rebate recipients, including the elderly and disabled.

Corzine, speaking after the dedication of the Donald K. Tucker Complex, would not discuss his $30.8 billion spending plan, saying: "I'd rather people focus on the whole issue as opposed to any one specific part."

While several taxes will rise, some residents would see tax breaks. Legislative sources have confirmed Corzine plans to spare more residents from having to pay any state income tax, raising the threshold from $20,000 to $25,000.

This way, some of those people wont see the tax increases due to the sales tax, the cigarette taxes, and liquor taxes.

It's called hiding the tax increases, and it's a time honored tradition among all politicians because no one wants to be caught holding the bag when the tax increases start hitting pocketbooks and paychecks. Corzine's figured that it was best to avoid any kind of income tax surcharge, but that doesn't mean that these tax increases are a good idea either.

The Division of Taxation has some relevant information on this subject. Their most recent comprehensive report on the income tax is for 2003.