Wednesday, February 09, 2005

Codey is tempted to tax deposits in 401(k) plans

The Star-Ledger's article about acting Governor Codey's new taxes shows just how far the Democrats will go to steal every last cent the taxpayers earn. In the latest proposal, deductions to 401(K) plans would no longer be deductible from income. Thus, the state would tax the money once when it was first earned, and again when it was withdrawn during retirement.

Trying to justify their theft, unnamed "officials" said

Some states, including Pennsylvania, already tax 401(K) contributions as they are made.
Well guess what, "officials" -- the "But Tommy down the street does it!" defense didn't work when I was a kid, and it's not going to work now.

The official said contributions to other retirement plans, such as IRAs, Keough Plans, teacher retirement accounts and deferred compensation accounts are already subject to the state taxation.
"It's not a tax increase. It is consistency. All (retirement) plans should be treated the same," the official said.

OK, let's try this one more time. If you aren't taxing it now, and you propose to tax it later, then that's an INCREASE.

And in yet another bold move to stick it to the people of New Jersey:
Lawmakers in 1996 restored a system that allows residents to deduct property tax bills of up to $10,000. The plan under consideration would eliminate those deductions for wealthier residents -- perhaps those earning more than $250,000.

By the convoluted math of state "officials," this means pretty much everyone. Look at the so-called "millionaire's tax" McGreevey pushed on us last year, where $500,000 in income was defined as a millionaire. Now according to this article, Codey wants to extend the tax rate hike down to couples making $150k or individuals making $75k. Following the math here, ($1M -> $500k -> $75k), the property tax deduction proposed will end up affecting everyone with an income above $18,750 -- about $9 / hr assuming full time employment.

This state needs a governor and legislature to instill fiscal discipline in the government on the spending side. The constant resort to increasing tax rates and taxable items will only drive more and more people from the state. Remember that when you go to the polls for the primary in June and the general election in November.