New Jersey News Record: Poorest NJ Families Have Greater Tax Burden Than Wealthy
media mentionJanuary 30, 2013
STATE – New Jersey’s poorest families spend a greater percentage of their income on taxes than the state’s wealthiest, according to a report released this week by the Institute on Taxation & Economic Policy in Washington.
According to the study, “virtually every state’s tax system is fundamentally unfair, taking a much greater share of income from middle- and low-income families than from wealthy families.”
Gov. Chris Christie’s policies – rejecting a higher tax rate for millionaires, slashing the Earned Income Tax Credit for the working poor after he took office, and vetoing an attempt to index the minimum wage against inflation – have not helped the disparity.
Families in the top one percent of New Jersey incomes (those making $679,000 0r more) pay just seven percent of their earnings in taxes, while families in the bottom 20 percent (those making less than $21,000) spend 11.2 percent of their income to pay taxes. While the wealthiest families pay income tax at higher rates, property and sales taxes have a greater effect on low income residents.
Families in the bottom 20 percent spend 5.5 percent of their income on sales and excise taxes, while the richest one percent spends 0.7 percent of their income that way.