New Jersey Governor Chris Christie’s proposal to cut  income taxes by ten percent will benefit the rich and not the middle class.

Christie’s plan would benefit taxpayers who pay a significantly higher income tax rate under the state’s current tax system.  But the plan doesn’t help middle-class who are struggling more with the property tax rate.

“We all want to cut taxes, but we want to cut the right taxes in ways that help those most in need and that provides the most benefit to the economy,” said Senator Paul Sarlo (D-Bergen), chairman of the Senate Budget and Appropriations Committee, which conducted the first of many expected hearings Monday on the tax cut proposal.

Republicans argue that the Democrats are rebuking the proposal too quickly.

“Democrats cannot have a knee-jerk reaction,” State Sen. Kevin O’Toole (R-Essex) said. “History shows that it will create more income tax revenue, attract jobs and more opportunities.”

O’Toole noted that when former Gov. Christine Todd Whitman, also a Republican, cut income taxes in the 1990s, overall income tax revenue increased as the economy expanded, incomes rose and jobs were created.

Under the proposal, a family earning $50,000 a year would save $80.50, and those making $100,000 would save $275, according to David Rosen, budget and finance officer with OLS. Families who make $1 million would save $7,265, Rosen said.

The Office of Legislative Services also did an analysis of the taxes paid in 2004 and found that NJ taxpayers who made less than $200,000 paid a greater share of their income toward property taxes than income taxes.  For example, a family that makes $80,000 paid about 6 percent of its gross income for property taxes and about 1.6 for income taxes.

Based on the analysis, it seems unlikely that Cristie’s income tax cut proposal will win approval. Expect the Democrats to offer a counter proposal that would emphasize property tax cuts for the middle class.

The IRS now has over 12,000 free tax preparation sites open nationwide to help taxpayers.  As part of it’s campaign to help low income and senior taxpayers, the Internal Revenue Service continues to expand its partnerships with nonprofit and community organizations providing vital tax preparation services for low- to moderate-income and elderly taxpayers.

The IRS Volunteer Income Tax Assistance (VITA) Program offers free tax help generally to people who earn $50,000 and less. The Tax Counseling for the Elderly (TCE) Program offers free tax help to taxpayers who are 60 and older.

Today, partners and local officials will be hosting news conferences or issuing news releases nationwide to highlight the Earned Income Tax Credit (EITC) and their free tax preparation programs. The EITC is one of the federal government’s largest benefit programs for working families and individuals. But taxpayers must file a tax return, even if they do not have a filing requirement, and specifically claim the credit to get the benefit.

Taxpayers need to present the following items to have their returns prepared:

• Photo identification
• Valid Social Security cards for the taxpayer, spouse and dependents
• Birth dates for primary, secondary and dependents on the tax return
• Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers
• Interest and dividend statements from banks (Forms 1099)
• A copy of last year’s federal and state returns, if available
• Bank routing numbers and account numbers for direct deposit
• Other relevant information about income and expenses
• Total paid for day care
• Day care provider’s identifying number

To file taxes electronically on a Married Filing Jointly tax return, both spouses must be present to sign the required forms.

Trained community volunteers can help eligible taxpayers with credits, such as the EITC, Child Tax Credit or Credit for the Elderly. Also, many sites have multilingual volunteers who can assist people with limited English skills. To locate the nearest VITA site, taxpayers should call 800-906-9887.

As part of the IRS-sponsored TCE Program, AARP offers the Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season. Trained and certified AARP Tax-Aide volunteer counselors help people of low-to-middle income with special attention to people age 60 and older. To locate the nearest AARP Tax-Aide site, call 888-227-7669 or visit AARP’s Internet site.

The military also partners with the IRS to provide free tax assistance to military personnel and their families. The Armed Forces Tax Council (AFTC) consists of the tax program coordinators for the Army, Air Force, Navy, Marine Corps and Coast Guard. The AFTC oversees the operation of the military tax programs worldwide, and serves as the main conduit for outreach by the IRS to military personnel and their families. Volunteers are trained and equipped to address military specific tax issues, such as combat zone tax benefits and the effect of the EITC guidelines.

In addition to free tax return preparation assistance, most sites use free electronic filing. An e-filed tax return means a fast refund. The IRS can generally issue refunds to taxpayers who combine e-file and direct deposit in as few as 10 days.

Taxpayers who file electronically also can opt to file now and pay later. If taxpayers owe, they can make a payment April 17, 2012, by authorizing an electronic funds withdrawal (direct debit) from a checking or savings account, paying by credit, by check or money order (made out to the United States Treasury) using Form 1040-V, Payment Voucher.

For taxpayers who want to prepare and e-file their own tax returns, there is IRS Free File. Everyone can use Free File, the free way to prepare and e-file federal taxes either through brand-name software or online fillable forms. Individuals or families with 2011 adjusted gross incomes of $57,000 or less can use Free File software. Free File Fillable Forms, the electronic version of IRS paper forms, has no income restrictions. For either service, taxpayers must go through www.irs.gov/freefile to access the programs.

Taxpayers also can seek free assistance at the 400 IRS Taxpayer Assistance Centers nationwide. Locations nationwide are listed on www.IRS.gov.

You can help members in your community by spreading the news about free tax help to the elderly and individuals who could use help with their taxes

source: irs.gov

A report issued by Citizens for Tax Justice and the Institution on Taxation and Economic Policy suggest many of the largest U.S. corporations use loopholes and pay lobbyists to significantly reduce the amount of corporate income tax they pay.

The study suggests that inefficiencies of the tax code, using tax loopholes and lobbyist influence have reduced the amount of corporate tax they pay from 35% to 18.5%.

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