N.J. Treasurer Says Low Earners Pay Less Than Neighbors

New Jersey (STONJ1) residents earning less than $150,000 pay lower income taxes than people in nearby states, including New York and Connecticut, while top earners pay a higher rate, Treasurer Andrew Sidamon-Eristoff said.

The state’s revenue is “volatile” because of its progressive income tax, which is more dependent on the highest earners, Sidamon-Eristoff said. That means New Jersey suffers more than other states during an economic slowdown and outperforms during a recovery, he said during a breakfast with business owners in Monroe.

Governor Chris Christie, 49, a first-term Republican, is banking on a 7.3 percent jump in revenue to fund a $32.1 billion budget in the year starting July 1 and his 10 percent income-tax cut for all residents. As a projected economic recovery takes hold, gains made by those earners paying more taxes will allow New Jersey to outpace its neighbors, Sidamon-Eristoff said.

Under New Jersey’s income-tax structure, which increases the rate as income rises, the top 1 percent of earners pay 38 percent of all taxes, Sidamon-Eristoff said. Those earning $1 million pay more than their neighbors, according to a chart provided by the treasurer’s office.

“We get huge swings as a result of the greater economy,” the treasurer said. “Because we are so progressive, it’s extremely volatile as a revenue base.”

To contact the reporter on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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