Missouri’s legislature has approved nearly $2 billion in tax incentives for Boeing after a House vote today, and the plan awaits Governor Nixon’s (D) signature. We’ve written on this issue extensively, following it from...
- NJ Biz quotes Scott Drenkard on Garden State Tax Reform
NJ Biz quotes Scott Drenkard on Garden State Tax Reform
By Katie Eder
As New Jersey legislators continue to push conflicting versions of a tax cut proposal under the looming June 30 budget deadline, a new study by the nonpartisan Tax Foundation shows a plan by Assembly Democrats to use a so-called "millionaire's tax" to fund a tax credit would hinder economic growth in the state.
"High progressive tax rates disincentivize developing job skills and career advancement, and reduce the number of hours people are willing to work," the report said. "Taxes on high-income filers include business income, and raising taxes on this group would have negative effects on long-term economic growth."
While Gov. Chris Christie twice vetoed attempts to reintroduce a millionaire's tax — actually, an income tax surcharge on the state's wealthiest residents — Democrats have threatened to put the measure on the ballot as an amendment to bypass a veto.
According to Tax Foundation economist Scott Drenkard, regardless of which tax cut plan is adopted, the state "already has a pretty progressive income tax code" weighing on top earners.
"Folks on the left say Christie's plan would disproportionately benefit the rich, but what he was going for was a 10 percent cut across the board," Drenkard said. "In raw terms, his cut is larger for high-income earners, but they're already paying more taxes under the state's progressive tax code."
Drenkard said progressive tax policies, like a millionaire's tax, disproportionately "lean on high-income earners to fund budget shortfalls, which makes for exceptionally volatile revenue streams" and creates problems with funding government services.
"When states tie their revenues to businesses' incomes, their revenues streams are linked to business and economic cycles, which aren't very stable," Drenkard said. "As states face budget shortfalls, moving away from progressive taxes will provide more stable revenue streams."
Hearing of the Indiana Commission on State Tax and Financing Policy
November 18, 2013
Chairperson Hershman, Members of the Commission:
My name is...
This study provides an in-depth discussion of the distribution of U.S. tax and spending policies across various subgroups of the population, mainly income groups, from 2000-2012. The study finds that in calendar year 2012, governments at all...
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