"The income tax that started at 2 percent under Governor Byrne is now 9 percent."
Chris Christie on Tuesday, September 25th, 2012 in a campaign event in New Hampshire
Chris Christie says state income tax jumped from 2 percent when it was first enacted to 9 percent now
Whet the appetite of liberal politicians with a new tax and Gov. Chris Christie warns they’ll become ravenous.
That’s why Christie told a crowd in New Hampshire they should vote on Nov. 6 for Ovide Lamontagne, the Republican candidate for governor of the Granite State. Otherwise New Hampshire, which doesn’t tax wages, may go the way of New Jersey.
Christie said 35 years ago New Jersey also didn’t have an income tax, but then "Governor Brendan Byrne, a Democrat, said if you just give me a small income tax, just a little one, I will lower your property taxes, for the people who have the highest property taxes in America back in 1977. So 35 years later, what have we got? We still have the highest property taxes in America and the income tax that started at 2 percent under Governor Byrne is now 9 percent -- 9 percent.
"Here's the key everybody: you let a liberal politician in the door and give them permission to give you a new tax, they only know one direction for that tax to go and that's up," Christie said at the Sept. 25 event.
Did New Jersey’s income tax more than quadruple since it was first enacted, as Christie said?
The governor’s statement is partially accurate because a group of individuals -- those earning more than $500,000 in taxable income -- are now subject to a statutory income tax rate of 8.97 percent.
But those individuals represent only a small percentage of filers in New Jersey and the tax rates are lower for other income levels.
The governor’s office did not respond to requests for comment, but the history of the state’s income tax is clear.
In 1976 -- during Byrne’s first term -- the state passed a temporary income tax with two rates.
A 2 percent rate was levied on income less than $20,000 or about $80,000 in today’s dollars, according to the U.S. Bureau of Labor Statistics.
Income in excess of $20,000 was taxed at the top rate of 2.5 percent.
A year after the temporary tax was enacted, the state made it permanent.
Over time New Jersey modeled its income tax into a more progressive system, which now has rates ranging from 1.4 percent to 8.97 percent depending on income level and filing status.
The state’s top rate is 8.97 percent, which only applies to income in excess of $500,000. Less than 2 percent of taxable New Jersey resident returns in 2009 had that level of income, according to state Treasury Department data.
An individual with taxable income between $75,000 and $500,000 pays a 6.37 percent rate on that income. For income between $40,000 and $75,000, the rate is about 5.5 percent.
The lowest rates are 1.4 percent and 1.75 percent, which are lower than the state’s rates in 1976. Those rates apply to incomes below $20,000 or between $20,000 and $35,000, respectively.
So for Christie to suggest the income tax, in general, jumped from 2 percent to 9 percent is misleading. That’s true for one income level, but the statement oversimplifies New Jersey’s current income tax system.
Christie said, "The income tax that started at 2 percent under Governor Byrne is now 9 percent."
When the state first implemented an income tax in 1976, two rates existed -- 2 percent for income less than $20,000 and 2.5 percent for income more than $20,000 -- but the state has since introduced a more progressive tax system.
New Jersey’s top rate is nearly 9 percent now, but applies only to taxable income above $500,000.
Every other income bracket is subject to a rate lower than 9 percent, with some income levels charged a rate of less than 2 percent.
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