Found this from Atrios:
Max speaks, you listen!
My cancelled debate topic on O'Rilly was a tax proposal by the Democratic governor of New Jersey, so I'm loaded for bear on this one. Here is how InstaPundit favorite Jeff Jarvis describes it:
See Fritz Schrank on McGreevy's plan to raise the tax rate on people who earn over $500k by 29 percent. It's positioned as a "millionaire" surcharge (though it's only halfway to a million) and you may think that everybody else in the state who earns less would say, "F the rich." But no. It's still a tax increase. New Jersey hates tax increases. It hates tax increasers more. And they're smart enough to see that if the rich leave the state, that will have an impact on taxes, jobs, and real estate.
And speaking of real estate, McGreevey is raising the real estate transfer tax 76 percent over two years. So all the real-estate "millionaires" whose homes have gone up in value see themselves having to pay the state when they sell.
"29 percent!" Golly gee willikers. Is the class war upon us? Judge for yourself. The change in question is an increase in the top marginal rate of tax on individual income from 6.37 to 8.97%, or 2.6 percentage points. To get 29 percent, you have to divide 2.6 by 8.97, which is a little weird since the 2.6 is an increase over the base of 6.37. Maybe JJ thought nobody would believe 41 percent, which is the change in rate relative to 6.37.
Incidently, the 2.6 percent rate increase amounts to less because state income taxes are deductible against Federal taxable income. If you're in the top bracket of the Federal tax, likely if you earn over $500,000 a year, your marginal tax rate is 35 percent. Since a dollar of state income tax is deductible, an extra dollar of state tax means 35 cents less of Federal tax, so you're really only out 65 cents. The effective rate increase is not 2.6 percentage points. It is 65 percent of 2.6, or 1.69 percentage points.
If you relied on JJ, you would never know the use for this pitiless tax increase: to reduce property taxes. New Jersey property taxes are the highest in the nation. Moreover, New Jersey's effective tax rate on the poor is third highest in the country (see p. 5). New Jersey has a regressive tax system: lower income persons pay a much higher share of their income in taxes than the wealthy. So what is in question here is a modest shift in tax burden...
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