
James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Author: James F. McDonough
Date: July 1, 2015
Of Counsel
732-568-8360 jmcdonough@sh-law.comAccording to the NJ Spotlight, the income tax hike plan is estimated to generate more than $850 million in tax revenue, enabling the state to pay down its $83 billion unfunded pension liability.
After Governor Christie vetoed all previous income tax hikes, Lesniak’s reform bill would effectively cut the $350 million estate tax. However, the bill would simultaneously increase the income tax for high net worth residents to $1.2 billion, making it the largest income tax hike in New Jersey history. The state would also have the third highest income tax in the nation, but still rank behind New York and California.
The “millionaire tax” reform would increase the state income tax for residents making more than $350,000 from 6.37 percent to 8 percent. This includes rate hikes for individuals at $500,000 to 10.25 percent, and stiffer increases for residents with over $1 million to 10.75 percent.
According to the report, the state owes $2.75 billion to fulfill its budget deficit from 2014-2015, which includes $53 billion in unfunded pension liabilities. Senator Lesniak stated that New Jersey has not made pension payments for 20 years.
“Without additional revenues, the state is facing a train wreck at the end of June that could only be duplicated by Congress. No one wants that to happen,” Senator Lesniak argued. “Public and private workers all need to have their pension income secure. Our proposal will help the governor and legislators fulfill that obligation.”
The $850 million that the income tax hike plan would generate is sufficient to fund the third year of pension payments missed in 2014.
Critics of the proposal argued that it does not address Governor Christie’s $900 million cut in pension payments from the 2014 budget. The debt accrued is the result of a significant drop in revenues from state income taxes in 2014, which raises concerns that further tax hikes would drive wealthy residents out of New Jersey.
Furthermore, critics point out that Lesniak’s plan falls short of fulfilling the $1.5 billion necessary to bring pension payments on schedule. Ultimately, without a solution to the pension crisis, there is no hope to balance the budget for 2015, which means that an additional pension cut is inevitable.
There is also criticism that the bill hurts small businesses in the state, because many of them pay taxes through personal income taxes to avoid the stiffer business tax rates.
Senator Lesniak noted that by eliminating the estate tax, he hopes to convince residents to stay in New Jersey. According to New Jersey Chamber of Commerce President, Tom Bracken, the New Jersey Estate tax, when levied against individuals with estates worth $675,000 or more, would save millions for high net worth retirees. It remains to be seen if wealthy residents would perceive the immediate annual burden of an income tax increase as acceptable.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]
Author: Kenneth C. Oh
On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]
Author: Matthew F. Mimnaugh
If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]
Author: Jesse M. Dimitro
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!