the staff of the Ridggewood blog
Ridgewood NJ, In a new GOP web ad released today, Assemblyman Anthony M. Bucco explains how New Jersey’s progressive income tax brackets are reducing wages even when people receive cost-of-living raises.
“When income tax brackets are very close together, pay raises push taxpayers into a higher bracket even though they really aren’t wealthy,” said Bucco (R-Morris). “This can be costly for people and their families who rely on every dollar they earn.”
In New Jersey, even modest raises could double a person’s top income tax rate. In an effort to correct this problem, Bucco sponsors legislation (A1399) to index state income taxes to inflation – something the federal government has been doing since 1986.
“New Jersey’s progressive brackets are actually reducing a person’s income over time when you factor in the cost of inflation,” Bucco explained. “As incomes rise and people are forced to pay a higher rate, paying bills becomes harder and taxes just keep going up.”
Indexing is designed to stop what accountants and economists call “bracket creep,” which happens as increased income pushes taxpayers into a higher tax bracket. Of the 34 states with bracketed income tax systems, 14 of them wholly or partially index their tax brackets to inflation.
“Tying taxes to inflation is a vital reform to make New Jersey more affordable,” said Bucco. “Taxpayers have been waiting too long and need to be recognized as people, not a source of government revenue.”
