It's well known the state is in bad shape financially. But why that's true and what to do about it are-at the very least-subject to debate. We are here today to fuel that debate with the Fairness Alliance Plan for Investing in New Jersey's Future. It restores revenue-and fairness.

It's very important to make clear that we didn't just get here because of how much the state spends. We also got here because of what the state decided not to collect from people who could afford to pay their fair share. The Fairness Alliance Plan addresses this.

For example, the state has lost over $14 billion because of 10 years of state income tax cuts. That's a big reason for the hole we're in. Our plan responds to that. It extends the millionaires' tax to incomes of $300,000 and above; and for incomes between $150,000 and $300,000 it raises the top rate to 7.5% from 6.37%. It doesn't affect incomes below $150,000-about 90% of New Jersey households-because for those people, the income tax cuts were so small they didn't even cover the increase in property taxes.

Not cutting the income tax would have substantially lessened the current crisis. That's just as true in New Jersey as it is at the federal level. Former Labor Secretary Robert Reich pointed out recently that if the wealthiest paid taxes at the level they used to, there would be no federal deficit. That same logic applies here. And so does the same illogic-which says that giving breaks to the people who need it least is somehow good for everyone.

Our plan also imposes a Financial Assets Tax on the wealthiest 1% of New Jersey households. When you make a middle-income household pay property tax you are taxing pretty much their only major asset: a house. But the wealthiest hold vast portfolios of stocks, bonds, trusts and other financial instruments, the value of which is not taxed. Yet the top 1% got federal tax cuts averaging $40,000 apiece last year; and they've gotten fully a third of all the federal tax cuts since 2001.

Our plan would call upon these people to pay a tax of just one-half percent, and only on their intangible financial assets exceeding $2 million.

Our plan would start to bring New Jersey's sales tax into the 21st century by extending it to a number of items not now covered-items that for the most part are used by upper income households. That includes memberships to golf and country clubs, limousine services, air charter services and private investigation services. Many of these already are taxed in neighboring states.

And finally our plan would raise registration fees on vehicles weighing more than 3,500 pounds. This would not only be an incentive to drive fuel efficient cars, but it also puts New Jersey in line with many other states that recognize the wear and tear that larger vehicles put on roads.

This package would raise about $2 billion. But it's aimed at doing more than that. It's aimed at changing the way we think about spending and revenue issues in New Jersey now. The way the debate is framed now, it pits the state's most vulnerable people against each other in a losing battle for crumbs. It's the rebate people against the pension people, the college tuition people against the PAAD people, advocates for children's health and wellbeing against supporters of affordable housing.

Something is very wrong with this picture. This pie should be bigger, and it would be-if the people who, frankly, will never have to worry how much tuition or prescription drugs or a place to live cost were called upon to pay more of their fair share. And again, these are the people who have gotten, continue to get, and will keep on getting as far as the eye can see, federal tax cuts all out of proportion to how many people we're talking about.

The millionaires' tax was a start. But more needs to be done. This plan will help ease the pain of the people most in need. And it will help start a long-term discussion about this state's priorities, about how to put New Jersey back on a sound financial footing and to require equal sacrifice in hard times.

Gov. Codey said everything should be on the table. He said people should come forward with alternatives to the cuts he proposed. Here they are. We've come forward and we're not going backwards.

For more information on
the Fairness Alliance plan, go to:
http://www.fairnessalliance.org

TAX REFORM

WORK & WAGES

BUDGET & FISCAL POLICY

TRANSIT ISSUES

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