New Jersey Raises Taxes On “Bad” Things Like Booze, Smokes and … Work?

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July 2, 2009 11:14 AM EDT by Brian Sullivan

New Jersey Raises Taxes On "Bad" Things Like Booze, Smokes and ... Work?

My newly adopted home state needs money.    Bad.    So, like many other states, it is raising taxes on a variety of behaviors that it views as bad and seeks to discourage.    Those include drinking, smoking and, apparently, working.

Here' the story from a few days ago:

TRENTON -- The state Assembly passed legislation today that raise taxes on cigarettes, hard alcohol and wine, along with boosting the tax rate for personal incomes over $400,000. The package of bills, designed to support the $29 billion state budget up for a vote later today, also eliminates the property tax deduction on income tax forms for households earning more than $250,000.

Let me get this straight.   New Jersey actually has the chutzpah to raises taxes on high-earners in the same bill that boosts taxes on so-called 'sin' behaviors that they seek to deter?    The message by association is clear: working hard and being successful is a behavior New Jersey considers bad and wants to punish.

The increases are going to be painful, even for the wealthy.     Taxes on income over $500,000 are going from an already-high 8.37% to a the whopping double-digit of 10.25%.   If you make more than a million a year you will be paying 10.76% on any income with seven digits.

They're also hitting the 'rich' in the property tax area.   From the new bill:

For the 2009 tax year, A4102 limits the property tax deduction for high-income taxpayers. Although normally allowed for property taxes paid up to $10,000, the deduction is limited to a maximum of $5,000 for a taxpayer who has gross income over $150,000, but not over $250,000, provided the taxpayer is not a qualifying senior, or blind or disabled. For such a taxpayer with gross income exceeding $250,000, no deduction is allowed.

And don't be fooled, this isn't just a tax hike on the rich.    It also attacks the middle class through the elimination of a property tax rebate check for many homeowners.   From the article:

The budget would reduce the size of the property tax rebate program, limiting it to households earning less than $75,000. Exceptions are in place for senior citizens and disabled residents. Households earning up to $150,000 qualified for rebate checks last year and the ceiling was $250,000 the year before.

Like many high-cost states, $75,000 per household ($47,500 per worker) is already hard enough to live on with the prices one must pay for everything in the Garden State.

Of course, these hikes come at a time when the federal government seeks to raise taxes on the wealthy and is touting how most Americans won't get hit.   In a speech on Februrary 24th the President said:

Now, let me be clear--let me be absolutely clear, because I know you'll end up hearing some of the same claims that rolling back these tax breaks means a massive tax increase on the American people: If your family earns less than $250,000 a year--a quarter million dollars a year--you will not see your taxes increased a single dime. I repeat: Not one single dime. Not a dime. In fact, the recovery plan provides a tax cut--that's right, a tax cut--for 95 percent of working families. And by the way, these checks are on the way.

I guess the President didn't consult New Jersey before giving the speech.    I venture to guess that most taxpayers don't care whether the hit is coming from their town, state or big brother.   A tax hike is a tax hike, regardless of whose hand is in your pocket.   And with the reduction of the property tax deduction allowance and rebate, New Jersey is clearly raising taxes on people making less than $250,000 per year.    So much for the big 'middle class tax cut.'

The message New Jersey (and many other states) is sending is clear - working hard and making money is considered a bad behavior and must be discouraged.   Just like smoking, drinking and gambling.   If taxes are going up on all of those at the same time, what else are we to believe?

I can hear the moving trucks headed to Pennsylvania already...

14 Comments

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Disincentivised

I guess the people are getting what they voted for. A great reminder that the way you vote has consequences.

July 2, 2009 at 12:47 pm

6ftrabbit

Have they started taxing sex yet? If they are, I sure would like to get kissed first.

July 2, 2009 at 2:33 pm

Studio TV-15

FWIW, I left NJ in 2003 for the left coast of Florida where life would be easier, more civil and assuredly cheaper. Within a year voters in my county (Pasco) added a 1-cent County Sales Tax to preserve open space. Conversely, my property taxes went down $90 that year. But! My home owners insurance doubled in that year. Still, I didn't to have file and pay State Income Tax. Florida, though, is an enormous state and I was spending 2x - 3x more on gasoline than before. And my auto insurance was actually higher than in NJ. So, am I saving anything yet?! And the BUGS and the HEAT! Ugh! If it all sounds confusing, it was and is. In my seeking to "save money" and teach NJ a lesson, I discovered the grass was greener on the other side of the fence because it was loaded with cow patties. I moved back to NJ in 2006. In leaving Florida, I felt like I had been let out of prison. Brian, everything you say about NJ is true and oh so very maddening. I loathe it as much as you do. And while PA may sound like a solution for some, fear not. That state will catch up with NJ in one way or another. The Garden State (that's NJ, for those of you who graduated high school after 1993) isn't an easy place to live on so many levels. But it's ALIVE and you'll never suffer sensory deprivation. NYC is an hour away by train and PA is just about the same from where I live. Yup, you pay through the nose to be here. I agree with you and share your indignation. But there is simply nowhere else I'd rather be.

July 2, 2009 at 3:32 pm

Wally

Well, birth control and condoms are taxed, and if you avoid those, so is all stuff you're going to have to buy the baby...so yeah, sex is pretty much taxed. Oral sex however....

July 2, 2009 at 6:49 pm

David Browning

well, come to Texas ... we are doing lots better than New Jersey. we even got a property tax cut this year; in addition, Texas does NOT have a state income tax. in contrast, we like rich folks in Texas because they create jobs and more jobs. so, why are you staying in New Jersey ??

July 2, 2009 at 9:29 pm

Cathleen Shamieh

There's a bill before the NJ State Assembly (A3215) to impose a "societal benefits charge" (read: tax) on all water utility customers. Money to be used for land acquisition for recreation, conservation, and farmland protection. Revenues would be unavailable for water quality improvement. But don't worry: according to the bill, "the amount due from any person subject to the societal benefits charge shall not exceed $50,000 per anum."

July 3, 2009 at 6:05 am

M.T. Wallet

Ryder's the winner, as half their trucks go one way and half the other, hauling the stuff of the "greener grass" crowd hither and thither. Pretty hard to find any state that's well run, where the cockroach isn't the state bird, or where you don't have to ration toilet flushes in order to pay your property tax.

July 3, 2009 at 7:25 am

jay

Economics 101, without exception when prices rise demand falls if their are alternatives. When Govt raises taxes, people have less money for investment. Their choice is to spend less or relocate somewhere that their money buys more or they have more money to buy. Gov. Swartzenager finally let the cat out of the bag. The state legislatures are having to raise more money though taxes to cover the enormous pension cost increases for state employees. The unions will not back down, just like the automakers so the legislature believes the tax payer should just pay more to cover the union pensions. We need to make some big changes in our elected officials or the taxpayer will never have any money!

July 4, 2009 at 12:01 am

Kadams

Nevada here they come.

July 4, 2009 at 6:22 am

Floridian

Dear Studio TV-15, Thanks for moving back to NJ.

July 5, 2009 at 3:55 pm

honest and upfront

We moved from Jersey to SC nearly 15 yrs ago, thinking housing is so much less, taxes are so much less, cost of living...very, very low here in SC. However, the old saying is true..you get what you pay for.it really sucks to live in SC....Southern hospitality?? NO! Politicians are all part of "the good old Boy" gangs, crime rate is soaring, and last but not least, THE WORST SCHOOLS IN THE USA! So, bottom line is..If I could afford to, I would pay anything, and I mean anything, to be living back in good old Jersey! That is home, and, you get what you pay for!

July 5, 2009 at 7:01 pm

randy zitzman

tv-15 the floridian is right good BY GO BACK TO n.j and stay ther and pay the high taxes I LIFT N.J AND I LOVE IT NO MOOR BUT OF JOKES just one thing dont vote the same ass wips in office p.s all n.y go back home so we reil n.j can have the stat back and stop voteing the DEM BACK IN RANDY ZITZMAN

July 6, 2009 at 10:47 am

Billy Ray Valentine

Until we remove politicians who tax first and never cut expenditures, this cycle of tax tax tax will never end. Elect only fiscally conservatives or Libertarians and watch your taxes disappear.

July 6, 2009 at 11:49 am

FauxNewz

Does nayone not realize that the President does not have the power to inlfuence how individual states run their government and apply state taxes? I suppose that was not taught in the class of any school, college or university that Brian Sullivan attended. I suppose since it was higher taxes for the state of NJ under the Obama administration he had to get a dig in somehow and throw in Obama's quote about taxes for those who make under $250K. A Fox article without an attack on Obama would be like the day without darkness. Well done, Brain Sullivan. Keep the masses misinformed. You must be up for a raise.

July 6, 2009 at 1:17 pm

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Brian Sullivan joined FOX Business Network (FBN) in April 2008 as an anchor. He co-anchors the 10am-12pm ET hours of the FOX Business block. Prior to joining FBN, Sullivan served as an anchor for Bloomberg Television where he hosted the programs Morning Call and In Focus.
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New Jersey Raises Taxes On "Bad" Things Like Booze, Smokes and ... Work?