Citizens Pay More Than 50% of Income to Government
By Seth Grossman, Political Columnist
Reprinted from February 4, 2009 Current Newspapers of Atlantic County
You cannot legislate the poor into freedom by legislating the industrious out of it. You don’t multiply wealth by dividing it. Government cannot give anything to anybody that it doesn’t first take from somebody else. Whenever somebody receives something without working for it, somebody else has to work for it without receiving. The worst thing that can happen to a nation is for half of the people to get the idea they don’t have to work because somebody else will work for them, and the other half to get the idea that it does no good to work because they don’t get to enjoy the fruit of their labor.?
Adrian Rogers (1931-2005), Southern Baptist minister and author.
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Last month, Forbes Magazine reported which counties in the U.S. had the highest property taxes on homes. Out of 3,143, each of New Jersey’s 21 counties made the top 50.
Passaic County was highest with a median home valued at $398,800,paying property taxes of $6,928 per year. That came to 8.5% of $81,853, the median homeowner’s income.
Atlantic County was 25th with a median home valued at $271,000, and a property tax bill of $4,931. The median income of homeowners in Atlantic County is $69,222, with 6.2% of that income paying the property tax.
Homeowners in Cape May and Cumberland Counties, two of the poorest counties in NJ paid 5.5% of their income for property taxes, the 48th and 49th highest rate in the nation.
Forty-three years ago, New Jersey had no sales tax, no income tax, and about a fourth of the business and other taxes we have now. But we had the third highest property taxes in the country. We started a 3% state sales tax to “fix” that problem, and quickly raised it to 5%, then 6%, and now 7%. When that didn’t work, we started a 2% state income tax in 1976, which now goes to 9%. We have been “fixing” high local property taxes with more state taxes ever since.
A quick (and very amateur) look at the tax tables shows that a couple in Atlantic County with a median home worth $271,900, no mortgage, and an income of $69,222 pays about $7,000 in federal income tax (10% of income) with 2 kids-and about $8,500 (12% of income) as empty nesters. I guess if they paid $700 (1% of income) to a good accountant, they could find enough deductions and exemptions to reduce their taxes by 2% of their incomes to about $5,600 (8% of income) and $7,100 (10% of income).
They pay about $2,500 (3.6% of income) for state income tax. They and their employers pay $9,900 (14.3% of their income) for social security and Medicare. They and their employers pay about $3,324 (6% of the first $27,700 of each of their incomes or 5% of total income) for state and federal unemployment, disability, “workforce development”, family leave, etc… insurances. And, of course, they pay $4,277 (6.2% of their income) as property taxes. That brings taxes to roughly 37% to 39% of income.
If median Atlantic County homeowners paid an average $10,000 per year for things like cars, TV’s refrigerators, movies, restaurants, motels, amusements, beer, wine, etc. with the 7% sales tax, they would pay $700 a year (1% of income). I guess that taxes on gasoline, water, natural gas, electric, TV, cable, phones, and internet (including the “societal benefits” and other charges for windmills, solar panels, free phones and internet for the “poor”, etc.) cost another 1% or 2% of income.
If they smoke or gamble, they pay at least another 1% of income on taxes for cigarettes, slot machines, and lottery tickets. If they travel, fish, or fix up their house, they would pay more taxes for tolls, beach fees, licenses, permits, and registrations. If they get caught doing 45 in a 35 mph zone, they would pay a special $283 tax to avoid insurance points. If they got disgusted and sold their home, they would pay a real estate transfer tax of $1,497 (2% of income).
But we also pay hidden taxes. When we buy from a store, or visit the doctor or hairdresser, much of what we pay them is for their taxes – on their buildings, their electric and phone bills, etc. Republican candidate for Governor, Steven Lonegan said we in NJ pay roughly 54% of our incomes to the government in taxes, directly or indirectly. And we didn’t get billed for any of the “stimulus” stuff yet!
For more information, visit www.libertyandprosperity.org or contact Somers Point attorney Seth Grossman at grossman@snip.net or 609-927-7333. Seth Grossman hosts a two way talk radio program every Saturday from 8am – 9am on WVLT Vineland, 92.1 FM.