Tax system must be fair

By Sen. Shirley Turner.

 

I don’t like taxes and neither do my constituents. 

We all accept that some form of taxation is required for services that keep society civilized and that improve our quality of life.  However, the taxation system should be fair and assure that the money collected is spent wisely and efficiently.  Fundamental to the idea of fairness is that the system must not coddle some while saddling others with debt beyond their ability to pay. 

New Jersey fails that test of fundamental fairness more than any other state in the union.

I recently introduced legislation that would provide a permanent and substantial source of funding dedicated to Property Tax Relief.  The funds would be allocated directly to taxpayers, and would include, but not be limited to, homestead rebates, credits, and reimbursements.  In short, it is tax relief that cannot be raided for one-shot budget fixes or denied based on the whims of whoever is in the Governor’s office or Legislature.

The resources for this Fund would accrue from the resurrection and streamlining of the most popular tax instrument the state has ever known: the so-called ‘millionaires’ tax.’  Before it was allowed to expire as part of the Alice in Wonderland process of government, it was the closest thing we had in New Jersey to a consensus tax policy. My version would be a true millionaires’ tax; it would adjust the rates for annual incomes above one million dollars unlike the old version which included adjusted tax rates on incomes down to $400,000.

If there is such a thing as a popular tax, the millionaires’ tax is it; 72 percent of New Jerseyans approve of the idea according to a recent Eagleton Poll. There are few things in New Jersey that receive that level of support; therefore, the Legislature and Governor’s office should pay heed.

In America, no one rises to the lofty heights of super wealth soley on their own merit without the assistance of favorable government policies.  Sometimes our market economy grants bloated payoffs to participants that are wildly disproportionate to their contributions to that economy. The philanthropist billionaire Warren Buffet, who believes that the wealthy should pay more, noted that this is especially true of the “members of the lucky sperm club” whose wealth was achieved neither through the sweat of their brow nor the furiousness of their thought.  New Jersey’s rich taxpayers are the only ones who are now paying less in taxes than they did a year ago.  

New Jerseyans en masse recognize that reality and they believe that those who have benefited so greatly from our system have a responsibility to the society that helped them become successful — especially when their state is struggling to rise from an ever-deepening well of fiscal despair. Shared sacrifice is something that should apply to the wealthy just as it applies to middle and lower income families and seniors. 

Aside from flying in the face of public opinion, allowing the tax to expire during a period of extreme fiscal crisis is irresponsible and forces us to fight the tax reform battle and the provision of basic services with one hand tied behind our backs.

In addition to the wealthy being protected from sharing in the income tax sacrifice, they are also exempt from paying their fair share of property taxes.  Many are exploiting the Farmland Assessment Act of 1964, which is intended to preserve agriculture.  Under this program, landowners with at least five acres can cut their property tax bills by 98 percent if they produce a meager $500 worth of goods on their huge estates.  According to the Asbury Park Press, these fake farmers are costing local governments at least $82 million a year in lost property tax revenues.   These wealthy landowners are being subsidized by the middle class at a time when their own property taxes are skyrocketing. 

Forgetting for a moment the question of whether it’s sound policy to ask rich citizens to share in the sacrifice, the evidence in support of the contention that they are leaving to escape our taxes is simply not there.  Studies have been inconclusive, but one of the least debatable aspects of research on New Jersey tax policy is that retirees, most of whom are middle or lower incomes, are the ones being forced to leave the state because they can’t afford our property taxes.  They are struggling to get by in a State that presents some incredible advantages for its residents, yet the State is unwilling to recognize that we all have the right to live here, equal to that of the wealthy. 

With property taxes in New Jersey still the highest in the nation, we must take the first step toward fairer taxation by enacting the millionaire’s tax.  There are many other steps along the journey that we need to take to reform New Jersey’s broken taxation system and to restore fiscal health and sanity to our government.  Another such step is to place the question of the millionaire’s tax on the ballot this fall; this will provide clear illumination of the path that State House leaders should follow.

The author is a state senatgor representing the 15th Legislative District

Tax system must be fair