MNeagle
9th April 2010, 11:59 AM
By Dunstan McNichol
April 9 (Bloomberg) -- Maryland’s 2008 tax increase on millionaires prompted few wealthy residents to leave the state, an analyst told New Jersey lawmakers weighing a higher levy on earnings of $400,000 or more.
No more than 2 percent of taxpayers affected by Maryland’s surcharge on incomes of at least $1 million left the state after the increase, David Rosen, chief budget officer for New Jersey’s nonpartisan Office of Legislative Services, told a Senate budget panel in Trenton yesterday.
Rosen’s testimony came as lawmakers began three months of hearings on Governor Chris Christie’s proposed $29.3 billion budget for the fiscal year starting July 1. Democrats who control the Senate and Assembly want to offset proposed cuts by reviving an increase in the top income-tax rate paid by 60,000 residents last year. The surcharge expired Dec. 31.
“It just doesn’t seem fair to give the wealthy a tax break while telling seniors you have to pay a bigger share by losing their rebates and paying a higher drug co-pay,†said Senate Majority Leader Barbara Buono, a Democrat from Edison, who sits on the budget committee.
Maryland income-tax returns were filed by 7,067 millionaires in 2007, according to a 2009 report by that state’s Office of Policy Analysis cited by Rosen. The next year, when a 1.25 percent surcharge on income of more than $1 million was added, all but 542 of those taxpayers still lived in Maryland and filed tax returns with the state, the report said.
2 Percent Drop
The decline amounted to 2 percent more than the number of millionaires who would be expected to disappear from Maryland’s tax rolls in a typical year, the report said.
“If there was an effect, it was a small effect on the margin,†Rosen said of the tax increase.
Democrats in New Jersey say a renewal of the income-tax surcharge would raise $1 billion to compensate for spending reductions proposed by Christie. The cuts include $800 million in tax rebates and $1.2 billion in aid to schools and cities.
Christie, a Republican, has pledged to veto any budget that includes a renewal of the surcharge.
“If you think for a second I’m changing my mind then you haven’t been listening to me for the last year,†Christie told reporters today in New Brunswick. “They chose the issue over the revenue. Now they’ve got the issue. They’re not getting the revenue. It’s not going to happen.â€
‘Governor, Not King’
Senate President Stephen Sweeney, a Democrat from Gloucester County near the Pennsylvania city of Philadelphia, today vowed to enact the surcharge renewal as part of the budget or as separate legislation he would sponsor.
“We’re not backing away,†Sweeney said in a telephone interview. “We have two strong-willed personalities. He was elected governor, not king.â€
New Jersey is projected to get $10.4 billion of its $27.7 billion in revenue this fiscal year from its income tax, according to budget documents. Forty-two percent of the income- tax revenue comes from the wealthiest 2 percent of taxpayers, Treasurer Andrew Eristoff said in a separate appearance before the budget panel.
A drop like Maryland’s wouldn’t be “small,†he said.
“It sounds like a lot of people, actually,†Eristoff said in an interview. “Two percent of 40 percent of your revenue is significant.â€
http://www.bloomberg.com/apps/news?pid=20601087&sid=aLy7RyiZZpVs&pos=9
April 9 (Bloomberg) -- Maryland’s 2008 tax increase on millionaires prompted few wealthy residents to leave the state, an analyst told New Jersey lawmakers weighing a higher levy on earnings of $400,000 or more.
No more than 2 percent of taxpayers affected by Maryland’s surcharge on incomes of at least $1 million left the state after the increase, David Rosen, chief budget officer for New Jersey’s nonpartisan Office of Legislative Services, told a Senate budget panel in Trenton yesterday.
Rosen’s testimony came as lawmakers began three months of hearings on Governor Chris Christie’s proposed $29.3 billion budget for the fiscal year starting July 1. Democrats who control the Senate and Assembly want to offset proposed cuts by reviving an increase in the top income-tax rate paid by 60,000 residents last year. The surcharge expired Dec. 31.
“It just doesn’t seem fair to give the wealthy a tax break while telling seniors you have to pay a bigger share by losing their rebates and paying a higher drug co-pay,†said Senate Majority Leader Barbara Buono, a Democrat from Edison, who sits on the budget committee.
Maryland income-tax returns were filed by 7,067 millionaires in 2007, according to a 2009 report by that state’s Office of Policy Analysis cited by Rosen. The next year, when a 1.25 percent surcharge on income of more than $1 million was added, all but 542 of those taxpayers still lived in Maryland and filed tax returns with the state, the report said.
2 Percent Drop
The decline amounted to 2 percent more than the number of millionaires who would be expected to disappear from Maryland’s tax rolls in a typical year, the report said.
“If there was an effect, it was a small effect on the margin,†Rosen said of the tax increase.
Democrats in New Jersey say a renewal of the income-tax surcharge would raise $1 billion to compensate for spending reductions proposed by Christie. The cuts include $800 million in tax rebates and $1.2 billion in aid to schools and cities.
Christie, a Republican, has pledged to veto any budget that includes a renewal of the surcharge.
“If you think for a second I’m changing my mind then you haven’t been listening to me for the last year,†Christie told reporters today in New Brunswick. “They chose the issue over the revenue. Now they’ve got the issue. They’re not getting the revenue. It’s not going to happen.â€
‘Governor, Not King’
Senate President Stephen Sweeney, a Democrat from Gloucester County near the Pennsylvania city of Philadelphia, today vowed to enact the surcharge renewal as part of the budget or as separate legislation he would sponsor.
“We’re not backing away,†Sweeney said in a telephone interview. “We have two strong-willed personalities. He was elected governor, not king.â€
New Jersey is projected to get $10.4 billion of its $27.7 billion in revenue this fiscal year from its income tax, according to budget documents. Forty-two percent of the income- tax revenue comes from the wealthiest 2 percent of taxpayers, Treasurer Andrew Eristoff said in a separate appearance before the budget panel.
A drop like Maryland’s wouldn’t be “small,†he said.
“It sounds like a lot of people, actually,†Eristoff said in an interview. “Two percent of 40 percent of your revenue is significant.â€
http://www.bloomberg.com/apps/news?pid=20601087&sid=aLy7RyiZZpVs&pos=9