Monday, August 28, 2006

Up In Smoke

Study calls Jersey a taxing place to call home

From Monday's Ledger:
New Jersey's reputation as a tax hell just got worse.

The $1.9 billion worth of tax increases in the state's new budget represents a 5 percent increase over last year, far outpacing any other state, according to a study by the National Conference of State Legislators.

New Jersey now has the highest state sales tax, tied with three other states, at 7 percent. Its cigarette tax now leads in the nation. And, of course, this all comes on top of the nation's highest average property taxes.

It's no wonder people like Donley Kuendel are thinking of leaving.

"The quality of life is going down about as fast as taxes are going up," said Kuendel, 50, of Atlantic Highlands. He and his wife are looking at houses in Delaware, where there is no sales tax, no income tax and property taxes are relatively low.

The National Conference of State Legislatures report found the national trend is toward keeping state tax increases at a minimum, or even cutting them. South Carolina and Texas this year raised taxes a little more than 1 percentage point; five states (Arizona, Nebraska, Oklahoma, Utah and Wyoming) cut taxes by more than a penny on each dollar.
The bulk of New Jersey's tax increase came in the sales tax, which -- after a battle that temporarily shut down state government before lawmakers agreed on the $30.8 billion spending plan -- was raised from 6 percent to 7 percent. That puts New Jersey in a four-way tie with Mississippi, Rhode Island and Tennessee for the highest state sales tax rate. (California charges 7.25 percent, but 1 percent goes to municipalities.)

The new $2.575 per-pack tax on cigarettes puts New Jersey ahead of all other states, although California voters will be asked this fall whether to raise that state's tax to $3.47.

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