Property Tax, State and
Local Taxes and the New
Jersey Constitution
*******
Supplemental Slides
Joint Committee on Constitutional Reform
and Citizens Property Tax Constitutional Convention
August 2006
Office of Legislative Services
Contents of Supplemental Slides:
Prepared in Response to Committee Questions
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Pages 3-10: Income tax, sales tax and combined tax
impacts over 30 years in the same format as property tax
display in original presentation.
Page 11: Three major components of property tax over 30
years.
Pages 12-16: Taxpayer impact illustrations from the original
presentation, with the effect of the Homestead Rebate
removed.
Pages 17-19: Income tax data distributed by income groups
from TY1998 to TY2003 using Division of Taxation data.
(Note – chart on page 19 includes OLS estimates for TY2004
and TY2005.)
Pages 20-25: Background data detail for each Tax Year
between TY1998 and TY2003. TY2004 and TY2005 data are
not yet released.
Total Property Tax Levy Per Capita (Statewide, 1975-2005)
Tax Levy Per Capita
Per Capita Property Tax Levy Adjusted for CPI Inflation
$2,500
$2,000
$1,500
$1,000
$500
Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
$0
Total Property Tax Levy as a Percent of Personal Income
(Statewide, 1975-2005)
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
0.0%
Total Income Tax Levy Per Capita (Statewide, FY 1975-2005)
Income Tax Per Capita
Per Capita Income Tax Levy Adjusted for CPI Inflation
$1,200
$1,000
$800
$600
$400
$200
Fiscal Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
$0
Total Income Tax Levy as a Percent of Personal Income
(Statewide, FY 1975-2005)
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
Fiscal Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
0.0%
Total Sales Tax Levy Per Capita (Statewide, FY 1975-2005)
Sales Tax Per Capita
Per Capita Sales Tax Levy Adjusted for CPI Inflation
$800
$700
$600
$500
$400
$300
$200
$100
Fiscal Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
$0
Total Sales Tax Levy as a Percent of Personal Income
(Statewide, FY 1975-2005)
2.5%
2.0%
1.5%
1.0%
0.5%
Fiscal Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
0.0%
Total Property, Income and Sales Tax Levy Per Capita
(Statewide, FY 1975-2005)
Property, Income, and Sales Taxes Combined Per Capita
Property, Income, and Sales Taxes Combined Per Capita Adjusted for CPI Inflation
$4,500
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
Fiscal Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
$0
Total Property, Income and Sales Tax Levy as a Percent of
Personal Income (Statewide, FY 1975-2005)
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
Fiscal Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
0.0%
Property Tax Levy Component Percentages of Total Levy
(Statewide, 1975-2005)
County Tax Levy
Municipal Tax Levy
School Tax Levy
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
Year
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
0.00%
Taxpayer Impact
Illustrations
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Three households in
identical homes on
the same street.
Each worth $7,000 in
local property tax.
Tax burdens can
vary significantly…
Taxpayer Impact
Illustrations (continued)
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1. Family of four.
Income $90,000.
$7,000 property tax
(7.8% of income).
$1,575 State
income tax (1.8%
of income).
Net taxes of $8,575
= 9.5% of income.
Taxpayer Impact
Illustrations (continued)
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2. Retired couple. Mostly
pension and S.S. income
$40,000.
$7,000 property tax less $850
for 2 years of “senior freeze”
benefit = $6,150 (15.4% of
income).
Pay $0 State income tax.
Net taxes of $6,150 = 15.4%
of income.
Taxpayer Impact
Illustrations (continued)
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3. High income
individual. Income
$400,000.
$7,000 property tax
(1.8% of income).
$22,844 State income
tax (5.7% of income).
Net taxes of $29,844
= 7.5% of income.
Taxpayer Impact
Illustrations (Summarized)
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$90,000 income
$8,575 comb. tax
9.5% tax burden
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$40,000 income
$6,150 comb. tax
15.4% tax burden
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$400,000 income
$29,844 comb. tax
7.5% tax burden
Number of Income Tax Filers by Income Group
Tax Years 1998 to 2005 (est.)
3,500,000
3,000,000
2,500,000
Above $500,000
2,000,000
$100,000-$500,00
$50,000-$100,000
1,500,000
Under $50,000
1,000,000
500,000
0
1998
1999
2000
2001
2002
2003
Income Tax Payments by Income Group
Tax Years 1998 to 2005 (est.)
$7,000,000
$6,000,000
$5,000,000
$ 000's
Above $500,000
$4,000,000
$100,000-$500,00
$50,000-$100,000
$3,000,000
Under $50,000
$2,000,000
$1,000,000
$0
1998
1999
2000
2001
2002
2003
Percentage Distribution of Income Tax Payments by Income Group
Tax Years 1998 to 2005 (est.)
100%
90%
80%
70%
Above $500,000
60%
$100,000-$500,00
50%
$50,000-$100,000
40%
Under $50,000
30%
20%
10%
0%
1998
1999
2000
2001
2002
2003
Est.
2004
Est.
2005
TY 1998
Data from SOI Table B: Full Year Taxable Returns Summary
NJ Taxable Income
Gross Income
Net Charged Tax
Returns
Income
$ in Thousands
$ in Thousands
Percent
Percent
1,798,883
$48,753,233
$574,132
62.3%
24.7%
11.3%
$50,000-$100,000
705,167
$52,695,298
$941,680
24.4%
26.7%
18.6%
$100,000-$500,000
359,027
$61,887,355
$1,960,043
12.4%
31.4%
38.7%
Above $500,000
23,658
$33,939,477
$1,591,725
0.8%
17.2%
31.4%
2,886,735
$197,275,363
$5,067,580
100.0%
100.0%
100.0%
Under $50,000
Totals
Returns
Charged Tax
Percen
TY 1999
Data from SOI Table B: Full Year Taxable Returns Summary
NJ Taxable Income
Gross Income
Net Charged Tax
Returns
Income
$ in Thousands
$ in Thousands
Percent
Percent
1,640,675
$46,080,301
$562,832
58.9%
22.8%
10.0%
$50,000-$100,000
717,784
$58,178,674
$976,943
25.8%
28.8%
17.4%
$100,000-$500,000
400,880
$64,237,564
$2,231,374
14.4%
31.8%
39.8%
Above $500,000
26,908
$33,211,834
$1,835,228
1.0%
16.5%
32.7%
2,786,247
$201,708,373
$5,606,377
100.0%
100.0%
100.0%
Under $50,000
Totals
Returns
Charged Tax
Percen
TY 2000
Data from SOI Table B: Full Year Taxable Returns Summary
NJ Taxable Income
Gross Income
Net Charged Tax
Returns
Income
$ in Thousands
$ in Thousands
Percent
Percent
1,451,642
$43,853,756
$514,661
54.8%
19.1%
7.9%
$50,000-$100,000
719,848
$54,325,271
$993,600
27.2%
23.7%
15.3%
$100,000-$500,000
443,806
$78,002,555
$2,489,641
16.8%
34.0%
38.2%
Above $500,000
32,283
$53,248,743
$2,513,966
1.2%
23.2%
38.6%
2,647,579
$229,430,325
$6,511,868
100.0%
100.0%
100.0%
Under $50,000
Totals
Returns
Charged Tax
Percen
TY 2001
Data from SOI Table B: Full Year Taxable Returns Summary
NJ Taxable Income
Gross Income
Net Charged Tax
Returns
Income
$ in Thousands
$ in Thousands
Percent
Percent
1,368,800
$43,772,583
$545,386
53.0%
20.0%
9.6%
$50,000-$100,000
752,700
$58,052,448
$1,063,151
29.1%
26.5%
18.6%
$100,000-$500,000
434,900
$77,603,259
$2,418,460
16.8%
35.4%
42.4%
Above $500,000
28,000
$39,561,316
$1,683,010
1.1%
18.1%
29.5%
2,584,400
$218,989,606
$5,710,007
100.0%
100.0%
100.0%
Under $50,000
Totals
Returns
Charged Tax
Percen
TY 2002
Data from SOI Table B: Full Year Taxable Returns Summary
NJ Taxable Income
Gross Income
Net Charged Tax
Returns
Income
$ in Thousands
$ in Thousands
Percent
Percent
1,407,000
$45,928,547
$583,415
54.2%
21.6%
10.7%
$50,000-$100,000
730,700
$57,519,199
$1,064,286
28.1%
27.0%
19.5%
$100,000-$500,000
433,900
$77,859,806
$2,426,010
16.7%
36.6%
44.5%
Above $500,000
25,500
$31,667,765
$1,373,295
1.0%
14.9%
25.2%
2,597,100
$212,975,317
$5,447,006
100.0%
100.0%
100.0%
Under $50,000
Totals
Returns
Charged Tax
Percen
TY 2003
Data from SOI Table B: Full Year Taxable Returns Summary
NJ Taxable Income
Gross Income
Net Charged Tax
Returns
Income
$ in Thousands
$ in Thousands
Percent
Percent
1,403,100
$46,080,301
$560,305
53.6%
21.0%
9.9%
$50,000-$100,000
734,300
$58,178,674
$1,082,323
28.0%
26.6%
19.2%
$100,000-$500,000
454,080
$81,619,513
$2,553,862
17.3%
37.3%
45.3%
Above $500,000
27,025
$33,211,834
$1,446,291
1.0%
15.2%
25.6%
2,618,505
$219,090,322
$5,642,781
100.0%
100.0%
100.0%
Under $50,000
Totals
Returns
Charged Tax
Percen