A few days ago, I complained of Christie’s sabotage of New Jersey’s already appalling financial situation in refusing to maintain existing taxes, much less increase them—on the very wealthy. While loudly insisting he wants to keep down property taxes on the middle and lower classes, he is quietly recovering them by slashing property tax rebates, and even adding hefty new taxes on services the middle and lower classes use.
In past years, I complained about the cockamamie income tax arrangement by which New York State gets first dibs on Eileene’s income because she works for a business headquartered in New York. She doesn’t actually work there, because she telecommutes, but she still has to pay New York for some reason, and New Jersey gives her credit for it against her New Jersey income taxes, but only partial credit. Explaining how the deductions shuffle out would be tedious; suffice to say that we pay a higher rate of income tax to New York than we would to New Jersey, and that some portion of Eileene’s income is taxed by both jurisdictions.
This year, Eileene’s boss performed some kind of administrative shuffle, the upshot of which is that Eileene no longer officially works in New York, but in New Jersey. This is a blessing; no longer do I have to fill three returns, of which New York’s is easily the most complicated. But I wasn’t informed of this, so I improperly calculated our taxes as usual for both states, then later properly calculated them only for New Jersey.
The change, on a salary in the neighborhood of $50,000, resulted in a drop of over $900 in taxes. Let me emphasize: $900 isn’t the amount of taxes we pay to these states, nor even the amount we’ve been paying to New York State; it’s the difference between what we used to pay both states and what we now pay New Jersey alone, an incremental margin.
That $900 represents taxes we could be paying to New Jersey. We don’t want to, obviously, but we’ve been paying it to New York for some time, and that without receiving any benefit for it in government services. Lots of New Jersey residents work in New York; several towns in New Jersey exist entirely as suburban havens for people with jobs in the Big Apple. Many of these New Jersey residents are working stiffs like Eileene; multiplying $900 by that number alone is a meaningful chunk of change. But more than that, a hugely disproportionate number of the commuters make a lot more as executives and traders and the like. The obscenely wealthy may live on Park Avenue, or in the Hamptons, but New Jersey is home to a hefty set of the comfortably well off. Their margin of taxes they’ve already been paying out of state should come to comfortably more than $900.
Refusing to shovel those taxes back into New York could help the New Jersey budget quite a bit. Taxing those salaries appropriately—that is, in a progressive fashion, rather than pretending the rich deserve to keep all their income while the rest of us pay for state expenses—would help even more. But that would threaten Christie’s vision of a fiscally healthy New Jersey, one which we can only reach by waging war on New Jersey workers while claiming to defend them.
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