The New York Times

Several Groups Ask Trenton To Tax High Earners More To Avert Cuts

The New York Times — Thursday, March 27, 2003


TRENTON, March 26 — Labor, social service and education groups called today for an income-tax increase on high earners to avert some of the severe cuts in Gov. James E. McGreevey's proposed budget.

The organizations, which estimate they have more than half a million members, are trying to ignite an idea that has been slow to catch on in Trenton: raising the top marginal rates on the wealthiest filers, about 2 percent of taxpayers, who they say benefit the most from Gov. Christie Whitman's tax cuts in the 1990's and President Bush's cuts in 2001.

Legislative leaders said the plan, like more modest versions of a "millionaire tax," was not likely to go far, but the sponsors hope Mr. McGreevey's painful cuts can provoke support for a shift in the tax burden.

Their proposal would temporarily raise the top rates on joint incomes over $400,000 a year, or individuals making over $250,000, to 7.5 percent from 6.37 percent, with steps up to 9.5 percent on incomes over $1 million. The three-year plan would yield about $1 billion a year, which its sponsors say could restore some school aid, Medicaid payments, prescription drug benefits for the elderly and many social services.

"The governor has said, `Show us the money,' " said the Rev. Reginald T. Jackson, the executive director of the Black Ministers' Council of New Jersey. "We'll show him $1 billion."

The groups endorsing the plan have not lined up sponsors for legislation, and many in Trenton say a tax increase is especially unlikely in an election year for all legislative seats.

Speaker Albio Sires of the Assembly, a Democrat, who has advocated a tax increase for joint incomes starting at $1 million, said: "I was having trouble getting support. This is more expensive, and it would be that much harder to get support."

Mr. McGreevey's opposition to tax increases is not softening, said his press secretary, Micah Rasmussen.

But Jon Shure, president of New Jersey Policy Perspective, a research group in Trenton that advocates more steeply graduated taxes, said, "We don't necessarily take him at his word when he says taxes will not be raised." Mr. Shure was joined by representatives of New Jersey Citizen Action, the New Jersey State League of Municipalities, the New Jersey Education Association and other organizations for the elderly and labor and several churches.

Many of them will be at the hearings under way on Mr. McGreevey's $23.7 billion budget plan, which would close a $5 billion gap. The Legislature, which reconvenes in May, must adopt a balanced budget by July 1.

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