Says raising the state income tax rate on millionaires to offset property taxes for other residents is "not a tax increase. It's a tax shift."
Lou Greenwald on Sunday, July 15th, 2012 in an interview on 6abc’s “Inside Story”
“Tax shift”? Lou Greenwald sets Truth-O-Meter ablaze with ridiculous description of tax increase proposal
As much as Assembly Majority Leader Lou Greenwald would like to call it something else, a tax increase is still a tax increase.
A Democrat from Camden County, Greenwald has proposed raising the state income tax rate on taxable income exceeding $1 million, and then using that new revenue to offset property taxes for people earning up to $250,000.
But that’s not a tax increase, Greenwald claimed in a recent TV interview.
"First of all, it’s not a tax increase. A tax increase is when you increase a tax that brings in more revenue that you spend in government," Greenwald said during a July 15 interview on "Inside Story" on Philadelphia-based 6abc.
"What we’ve offered is to take 16,000 people and have every penny that comes in from them offset property taxes up to 20 percent for 2.6 million filers, the other 8.8 million. So, it’s not a tax increase. It’s a tax shift."
Greenwald’s claim doesn’t make any sense, PolitiFact New Jersey found.
For the last few months, Greenwald has been leading the charge to raise taxes on millionaires in order to provide property tax relief for residents with annual incomes up to $250,000.
The tax hike was initially tied to a proposed income tax credit based on the amount of property taxes paid. More recently, the increase has been linked to providing roughly $800 million in additional property tax relief payments through the state’s Homestead Benefit Program.
Legislation sponsored by Greenwald -- Assembly Bill A-3201 -- increases the tax rate on taxable income greater than $1 million from 8.97 percent to 10.75 percent. Through a separate piece of legislation sponsored by Greenwald -- Assembly Bill A-3202 -- that additional tax revenue would go toward the higher property tax relief payments.
The Democrat-led Legislature passed both bills last month, but Gov. Chris Christie vetoed A-3202 outright and conditionally vetoed A-3201. Instead, the Republican governor called on legislators to amend that legislation to implement an income tax credit for homeowners earning up to $400,000 in taxable income.
In the TV interview, Greenwald offered a definition of a "tax increase" to explain how his proposal is not one.
But that definition -- "A tax increase is when you increase a tax that brings in more revenue that you spend in government" -- matches exactly what those two bills would do. One bill would "increase a tax," and the second bill would "spend" that extra revenue.
Brian McGinnis, communications director for Greenwald, maintained in an e-mail that the assemblyman’s proposal is a "tax shift" that would benefit millionaires as well.
"When our plan is taking every additional income tax dollar to reduce a local property tax expenditure for 95% of families, it’s a tax shift that ultimately accrues benefits to every family in our state through a lower property tax burden, stabilized property values and increased economic competitiveness," McGinnis told us.
The spokesman added: "The Majority Leader has frequently talked about the hidden tax on all New Jerseyans being the hit a family’s property values take because property taxes are so high. In providing significant property tax relief to 95% of New Jersey families, our plan would have addressed this problem—helping to stabilize property values and benefiting people throughout the state, including millionaires.
"Furthermore, as the Majority Leader said in the interview, lower property taxes for the middle-class makes our state a more attractive place to live, meaning millionaires (whom the Governor calls job creators) can attract more talented employees."
We gave Greenwald a False for a related claim from the same interview in this fact-check.
During a TV interview, Greenwald offered this description of his proposal to raise the state income tax rate on millionaires and use the extra money to offset property taxes for people earning up to $250,000:
"It’s not a tax increase. It’s a tax shift."
But despite how the money would be spent, raising any tax rates is clearly a tax increase. Calling such a measure a "tax shift" doesn’t make any sense, and Greenwald should know better. So, here’s three more words to add to his vocabulary:
Pants on Fire!
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