The State tax elevator Going Up !

States are increasing income and other taxes this year in the face of the dragging economy. In California, Governor Schwarzenegger has increased income taxes, sales taxes, and car license taxes.

California's budget and it's deficit are bigger than the entire budget of many entire countries. It's deficit, originally pegged at $41 billion (Yes billion!).




Closer to home, New York's Governor Paterson has also signed a budget which adds a 7.85% bracket for high income taxpayers, and 8.97% for taxpayer earning over $500,000. Itemized deductions for those making more than $1 million dollars are now disallowed completely. Want a flat tax, here it is!

There's also an MTA Tax on employer's based on the amount of wages paid to employers in NYC and MTA surrounding suburbs. This tax also applies to self employed people.

Here in our home state of New Jersey, the tax increases just keep on coming. Governor Corzine signed the budget bill a day early, June 29, 2009. Time to change our license plates from "The Garden State" to "The Income Tax State". Congratulations, we've got the highest marginal rate in the country now. But not necessarily the highest income taxes on an effective basis, probably New York or California still hold that title!


Income tax rate increases. Here's the new added brackets:
$400,000-$500,000 8%
$500,000-$999,999 10.25%
over $1,000,000 10.76%
The old prior year brackets topped out at 6.375% up to $500,000 and 8.97% over $500,000.

Property tax deductions are limited to:
$10,000 if your income is under $150,000
$5,000 if your income is under $250,000
$0 if your income is over $250,000

Homestead Rebates are limited to those making $75,000 or less and will be less than in prior years. If you are a senior citizen or disabled, the income limit is $150,000. No Rebates for renters this year unless you're over 65 or disabled.

Increases to the taxes on cigarettes, liquor, and insurance companies. The evil doers of the world. And by the way, forget about trying to win the New Jersey Lottery! Previously not taxed, all winnings over $10,000 are now subject to state income tax and withholding. So the left hand giveth, the right hand taketh away.


If Mr. T lived here, he might say, Pity the fool who runs for governor!