Tax Lawyer's Blog

Tax Girl Kelly Phillips Erb writes today that New Jersey Governor Chris Christie has not included in his budget an extension of the 2% increase in the top state tax rates:

When Gov. Christie revealed his budget plans, which included painful spending cuts all around, both Republicans and Democrats alike appeared surprised to see tax cuts… for the rich. Gov. Christie’s budget failed to extend the recent increase in the state’s top income tax rate, initially put into place by then Gov. Jon Corzine (D). The result is that the top 2% of NJ taxpayers will face a reduced rate in the upcoming tax year while other taxpayer rates stay the same. The cost in lost revenue? About $1 billion.

I love Tax Girl, but I think she is wrong when she says the failure to extend a temporary tax increase is a tax cut. It’s not.

Mr. Christie has not proposed new legislation that would reduce the tax rates of the so-called rich. He is merely refusing to sign on to a tax increase that his predecessor, Democrat Governor John Corzine, intentionally and knowingly set to expire.

So blame Corzine if you think the rich should be tagged with a surtax. He could easily have made the 2% increase permanent. But he didn’t. And now it takes an affirmative act by his successor to continue the increase.

I also must question Kelly’s suggestion that the failure to extend Corzine’s tax increase will cost New Jersey $1 billion. On the contrary, I would argue that it will save New Jersey money that it would have lost as a result of the growing phenomenon known as wealth-flight.

If you don’t believe me, read this and this and this.

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