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.

People are getting fed up with the increase of taxes. Take Frank Alford, a Floyd County, Indiana man.

Frank, who owns several single-family rental homes, showed up at the city-county building in New Albany to pay his property taxes with more than $21,000 in coins.  His reason?   To protest higher taxes.

Last year, Frank showed up to pay his taxes with dollar bills!

Alford loaded a garbage can with $21,333 in Susan B. Anthony dollar coins, and he carried a sign that read, “Property taxes gone wild.”

“I’m letting them know I’m a very unhappy taxpayer,” he said.

According to Mr. Alford, his property taxes have gone up 48 percent since 2006, and tax relief recently passed by the Indiana Legislature has done nothing for people who own rental property.

“The owner who lives in their property got all kinds of tax breaks. They don’t give you no homestead exemption, no mortgage exemption, nothing,” he said. “You’re paying double what you’re paying than owning your own home.”

Alford, a retiree with two hip replacements, loaded what he estimated was 400 pounds of coins and then headed inside to the treasurer’s office to settle up.
Deputy Clerk Bette Buechler did a quick tally of Alford’s property taxes.

When asked if the office has to accept the Susan B. Anthony coins, Buechler said, “I think I’m understanding if it comes in pennies, we don’t have to.”

A Floyd County deputy sheriff was asked to lend a hand getting the money to a nearby bank to be counted. As for Alford, this may not be his last protest.

“If we don’t get some relief, it may be in quarters, dimes, or pennies next year,” he said. “I’m angry at them.”