New Jersey is second in the nation in the dubious statistic of how much federal tax cuts directed here will contribute to the exploding national debt, recently released figures show.

According to research by Washington-based Citizens for Tax Justice, the average cost per family of four in New Jersey over the next six years will be a net of $40,092 after the income from tax cuts is factored. Only Maryland is higher, at $40,133. The national average for a family of four is $37,826.

New Jersey's per person share of the debt is $10,023, second to Maryland's $10,033. The national average is $9,456.

The Citizens for Tax Justice study details the huge added burdens that federal tax cuts and borrowing policies will impose on American families over the next six years. Robert S. McIntyre, director of CTJ, said, "Everyone knows that President Bush's tax cuts are heavily tilted towards the very wealthy. But we also need to keep in mind that the rest of us will pay dearly for those upper-income tax cuts, as we confront our share of the giant debt that Bush is building up."

Jon Shure, President of New Jersey Policy Perspective, said, "These numbers give us a good view of the high price tag for tax cuts. It's clear that New Jersey is a net loser in a game where the only winners are the few at the top who get back the most in tax cuts."

CTJ said Current Congressional Budget Office projections show that President Bush's tax cuts and economic policies are likely to add $3.8 trillion to the nation's debt burden, including amounts borrowed from Social Security over the fiscal 2002-2007 time frame.

The tax cuts will provide people with $1.036 billion over six years. But the added debt-the result of borrowing to pay for the tax cuts plus interest-will be $3.763 billion, for a net gain in debt of $2.727 billion.

For the middle 20 percent of taxpayers in New Jersey the average net debt burden over sox years will be $21,959-second to Maryland's $21,972. The national average is $21,068. New Jersey's figure reflects $4,523 in federal tax cuts for those families over six years and a $26,482 per family share of the debt.

The report is based on tax cuts by state and income group calculated by the Institute on Taxation and Economic Policy, and August 2003 Congressional Budget Office estimates. The added debt was allocated among states and income groups based on shares of adjusted gross income and population. The entire Citizens for Tax Justice report is available at: http://www.ctj.org/pdf/debt0903.pdf

TAX REFORM

WORK & WAGES

BUDGET & FISCAL POLICY

TRANSIT ISSUES

ECONOMIC DEVELOPMENT

VOTING & GOVT REFORM

© 2008 New Jersey Policy Perspective