You may not have heard, but New Jersey Governor Chris Christie continues to prove that he’s a millionaire’s best friend– at least when it comes to taxes.
Last Friday, Governor Christie announced that he and legislative leaders had reached a long-overdue agreement to replenish New Jersey's Transportation Trust Fund. Under the agreement, the earned income tax credit (EITC) would be strengthened, and sales taxes would be lowered–both benefiting working families. However, as part of this same agreement, Governor Christie and the Assembly included a poison pill: the complete repeal of the estate tax in New Jersey, which would benefit only those in the wealthiest 5% of families, to the tune of $300 million per year.
The estate tax in New Jersey currently applies to only households with assets above $675,000 per person.
Just last weekend, Governor Christie went on the air calling Donald Trump a "genius" for using the tax code to claim huge losses and reportedly avoid paying taxes for up to 18 years. He went on to suggest that Mr. Trump is the ideal person to fix the tax code to eliminate special interest loopholes for the wealthy and make the tax system work for the little guy. Yeah, right.
Though there has been much talk in the last week that all Americans want to pay as little tax as possible, in fact, as of this writing, over 40 wealthy New Jerseyans have sent an open letter to the Governor and the Assembly saying that they believe the estate tax should not be repealed. The letter states in part,
"As citizens who are among the wealthiest 5% of residents in our beloved state, we have both the means and the responsibility to contribute more to the needs of our state. We strongly object to the proposal to eliminate New Jersey’s estate tax on people like ourselves as part of the transportation bill... It would be a travesty to give a tax break to a small cohort of wealthy families (including ourselves) at the expense of adequately funding schools, health care, public infrastructure and other pressing needs in the state."
The signers suggest that instead of eliminating the tax altogether, the exemption level could be raised from the current $675,000 to $2 million per individual. That change would exempt 78% of the estates that currently would owe, yet preserve a full 72% of current estate tax revenue in New Jersey to rebuild infrastructure, fund education, and meet the range of other needs of New Jersey residents.