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Christie Push To Kill N.J. 'Death Tax' A Gift To The Rich, Groups Charge

NJ.com — January 20, 2016

By Samantha Marcus | NJ Advance Media for NJ.com

TRENTON — Liberal think tanks and advocates in New Jersey pushed back Tuesday against Gov. Chris Christie's State of the State call to eliminate the state's notorious estate tax.

Knocking out the estate tax would gouge about $300 million from the state budget for the benefit of a wealthy few, representatives of New Jersey Policy Perspective, Main Street Alliance, Anti-Poverty Network, New Jersey Citizen Action and NJ Working Families told reporters Tuesday.

These groups have been banging the drum for months against any deal that trades a cut or elimination of the estate tax for an increase in the gas tax to fund transportation projects.

Some Democratic and Republican lawmakers have already embraced cutting the estate tax or raising the exemption.

New Jersey's estate tax kicks in at $675,000 in assets, and the tax liability depends on the size of the estate. Those in support of eliminating it often say that with New Jersey's high property values, the estate tax is not just a tax on the very wealthy.

In his annual State of the State address, Christie rallied the Legislature to abolish the tax that "penalizes the next generation and harms the long-term economic future of our state."

New Jersey's comparatively low, $675,000 exemption "makes New Jersey unfair and uncompetitive," he said. "The estate tax isn't just something that affects the wealthy. It's penalizing middle-class families who want to pass down the family home to the next generation. Our tax structure incentivizes people to move to other states as they age — and when they do, to take their businesses and capital with them."

But the data belie that argument, said Gordon MacInnes, president of New Jersey Policy Perspective, which reported that just 4 percent of the 70,000 estates of New Jerseyans who die each year owe any taxes. Calling it a middle-class tax or blaming it for outmigration of billions of dollars in wealth is "overblown," he said.

Seven percent of estates that pay the tax are worth between $675,000 and $1 million, a third are worth $1 million to $3 million, 19 percent are worth $3 million to $5.34 million, and 41 percent are worth more than $5.34 million (the 2014 federal threshold).

Of the 3,000 estate that do owe money, 94 "pay 41 percent of estate tax in a given year," the report said. "Eliminating this tax would give these wealthy families a tax break averaging $1.3 million — a reduction 58 times larger than the break for the families with taxable assets between $675,000 and $1 million."

The group has previously reported that households' median wealth here is $117,000, far below the estate tax filing threshold. And the net worth of households with the highest 20 percent of incomes averages $366,000. The average home in New Jersey is worth about $350,000, the group has reported.

Ann Vardeman, program director of New Jersey Citizen Action, said its elimination amounts to a giveaway for the "super rich" that will jeopardize funding for transportation, education and safety net programs.

The estate tax is one of two death taxes in New Jersey. The other, the inheritance tax, has a much lower filing threshold, and the tax rate is based on how closely each inheritor is related to the deceased person.

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