This is how bad NJ’s tax situation is compared to other states
A new study confirms living in the Great Garden state isn't cheap.
In fact, it costs a small fortune to live here if you pay taxes.
Scott Drenkard, director of state projects for the nonprofit Tax Foundation, says a just-completed review finds “New Jersey has some of the highest individual income taxes in the country, and those rates are higher than a lot of other states close by.”
In addition he says, “New Jersey has one of the more complex individual income taxes compared to the rest of the country: There’s six brackets if you’re a single filer, seven brackets if you’re a married filer."
The top individual income tax rate is almost 9 percent.
In Pennsylvania, the individual income tax rate is 3.07 percent.
He adds in many states, married couples qualify for a tax break, but not here.
“If you get married in New Jersey and the incomes of the two members of the marriage are combined together, you could actually face a higher effective tax rate," he said.
Individual income tax rates for New Jersey, according to the Tax Foundation:
Single filer Married filing jointly
Rates Brackets Rates Brackets
1.4% > $0 1.4% > $0
1.75% > $20,000 1.75% > $20,000
3.50% > $35,000 2.45% > $50,000
5.525% > $40,000 3.50% > $70,000
6.37% > $75,000 5.525% > $80,000
8.97% > $500,000 6.37% > $150,000
The report finds seven states have no individual income tax, while 43 states levy the tax. New Jersey is among 41 that tax wage and salary income, but New Hampshire and Tennessee only tax dividend and interest income.
Additionally, eight states have single rate tax structures, while 33, including the Garden state, have graduated tax brackets.
New Jersey also has the highest property taxes in America, as well as other high taxes and fees, but this probably won’t change any time soon because “tax policy is used to provide revenue for government services," he said.
“One of the things that’s continually kind of hamstringing the state is a pretty overwhelming pension debt, which makes it so that your future spending liabilities are quite high.”
(To see how your town's property taxes compare, click here.)
He says another big problem in New Jersey is “the sheer number of municipalities in the state. Each one of those communities or townships doesn’t necessarily need to have its own school superintendent and police and fire units.”
More From WOBM: