Tag: Democrat Tax Increase

Taxing the 1% won’t cover the under-funding gap, you’d either have to raise state income taxes by 29% overall or raise the NJ sales tax to 10% just to maintain existing benefits…such measures would face significant obstacles from State constitutional mandates on the use of specific revenue sources for particular purposes, such as the dedication of all income taxes to property tax relief. In addition, the State must obey federal mandates, honor bonded obligations and meet other funding demands. As a result, roughly 87% of State revenues are effectively committed to specific purposes before the budgeting process begins. The remaining funds—$4.3 billion in the current budget—are counted on for vital functions such as law enforcement, public safety, the judiciary, and executive department offices. A “millionaires’ tax” imposing an average $50,000 additional annual tax on each millionaire, for example, would make only a small dent in the funding shortfall. It would still require the State to impose a 23% income tax increase on every other taxpayer. As a matter of political reality, potential tax increases of this magnitude would first be preceded by substantial benefit reductions. If existing pension and retiree health benefits are considered beyond reach, the remaining options would involve actions such as reducing active employees’ health benefits to the equivalent of Bronze-level coverage under the Patient Protection and Affordable Care Act (“ACA”) and eliminating retirement benefits for employees hired after 2010.