Property Tax, State and Local Taxes and the New Jersey Constitution ******* Supplemental Slides Joint Committee on Constitutional Reform and Citizens Property Tax Constitutional Convention August 2006 Office of Legislative Services
Contents of Supplemental Slides: Prepared in Response to Committee Question Pages 3-103 10: : Income tax, sales tax and combined tax impacts over 30 years in the same format as property tax display in original presentation. Page 11: : Three major components of property tax over 30 years. Pages 12-16 16: : Taxpayer impact illustrations from the origin presentation, with the effect of the Homestead Rebate removed. Pages 17-19 19: : Income tax data distributed by income grou from TY1998 to TY2003 using Division of Taxation data. (Note chart on page 19 includes OLS estimates for TY2004 and TY2005.) Pages 20-25 25: : Background data detail for each Tax Year between TY1998 and TY2003. TY2004 and TY2005 data are not yet released.
Total Property Tax Levy Per Capita (Statewide, 1975-2005) Tax Levy Per Capita Per Capita Property Tax Levy Adjusted for CPI Inflation $2,500 $2,000 $1,500 $1,000 $500 $0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Year
Total Property Tax Levy as a Percent of Personal Income (Statewide, 1975-2005) 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Year
Total Income Tax Levy Per Capita (Statewide, FY 1975-2005) Income Tax Per Capita Per Capita Income Tax Levy Adjusted for CPI Inflation $1,200 $1,000 $800 $600 $400 $200 $0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Fiscal Year
Total Income Tax Levy as a Percent of Personal Income (Statewide, FY 1975-2005) 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Fiscal Year
Total Sales Tax Levy Per Capita (Statewide, FY 1975-2005) Sales Tax Per Capita Per Capita Sales Tax Levy Adjusted for CPI Inflation $800 $700 $600 $500 $400 $300 $200 $100 $0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Fiscal Year
Total Sales Tax Levy as a Percent of Personal Income (Statewide, FY 1975-2005) 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Fiscal Year
Total Property, Income and Sales Tax Levy Per Capita (Statewide, FY 1975-2005) $4,500 Property, Income, and Sales Taxes Combined Per Capita Property, Income, and Sales Taxes Combined Per Capita Adjusted for CPI Inflation $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Fiscal Year
Total Property, Income and Sales Tax Levy as a Percent of Personal Income (Statewide, FY 1975-2005) 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Fiscal Year
Property Tax Levy Component Percentages of Total Levy (Statewide, 1975-2005) County Tax Levy Municipal Tax Levy School Tax Levy 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Year
Taxpayer Impact Illustrations Three households in identical homes on the same street. Each worth $7,000 in local property tax. Tax burdens can vary significantly
Taxpayer Impact Illustrations (continued) 1. Family of four. Income $90,000. $7,000 property tax (7.8% of income). $1,575 State income tax (1.8% of income). Net taxes of $8,575 = 9.5% of income.
Taxpayer Impact Illustrations (continued) 2. Retired couple. Mostly pension and S.S. income $40,000. $7,000 property tax less $85 for 2 years of senior freeze benefit = $6,150 (15.4% of income). Pay $0 State income tax. Net taxes of $6,150 = 15.4% of income.
Taxpayer Impact Illustrations (continued) 3. High income individual. Income $400,000. $7,000 property tax (1.8% of income). $22,844 State income tax (5.7% of income). Net taxes of $29,844 = 7.5% of income.
Taxpayer Impact Illustrations (Summarized) $90,000 income $8,575 comb. tax 9.5% tax burden $40,000 income $6,150 comb. tax 15.4% tax burden $400,000 income $29,844 comb. t 7.5% tax burden
Number of Income Tax Filers by Income Group Tax Years 1998 to 2005 (est.) 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 Above $500,00 $100,000-$500 $50,000-$100,0 Under $50,000 500,000 0 1998 1999 2000 2001 2002 2003
Income Tax Payments by Income Group Tax Years 1998 to 2005 (est.) $7,000,000 $6,000,000 $ 000's $5,000,000 $4,000,000 $3,000,000 $2,000,000 Above $500,00 $100,000-$500 $50,000-$100,0 Under $50,000 $1,000,000 $0 1998 1999 2000 2001 2002 2003
Percentage Distribution of Income Tax Payments by Income Group Tax Years 1998 to 2005 (est.) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1998 1999 2000 2001 2002 2003 Est. 2004 Est. 2005 Above $500,00 $100,000-$500 $50,000-$100,0 Under $50,000
TY 1998 Data from SOI Table B: Full Year Taxable Returns Summary NJ Taxable Income Returns Gross Income Net Charged Tax Returns Income Charged $ in Thousands $ in Thousands Percent Percent Per Under $50,000 1,798,883 $48,753,233 $574,132 62.3% 24.7% 11 $50,000-$100,000 705,167 $52,695,298 $941,680 24.4% 26.7% 18 $100,000-$500,000 359,027 $61,887,355 $1,960,043 12.4% 31.4% 38 Above $500,000 23,658 $33,939,477 $1,591,725 0.8% 17.2% 31 Totals 2,886,735 $197,275,363 $5,067,580 100.0% 100.0% 100
TY 1999 Data from SOI Table B: Full Year Taxable Returns Summary NJ Taxable Income Returns Gross Income Net Charged Tax Returns Income Charged $ in Thousands $ in Thousands Percent Percent Per Under $50,000 1,640,675 $46,080,301 $562,832 58.9% 22.8% 10 $50,000-$100,000 717,784 $58,178,674 $976,943 25.8% 28.8% 17 $100,000-$500,000 400,880 $64,237,564 $2,231,374 14.4% 31.8% 39 Above $500,000 26,908 $33,211,834 $1,835,228 1.0% 16.5% 32 Totals 2,786,247 $201,708,373 $5,606,377 100.0% 100.0% 100
TY 2000 Data from SOI Table B: Full Year Taxable Returns Summary NJ Taxable Income Returns Gross Income Net Charged Tax Returns Income Charged $ in Thousands $ in Thousands Percent Percent Per Under $50,000 1,451,642 $43,853,756 $514,661 54.8% 19.1% 7 $50,000-$100,000 719,848 $54,325,271 $993,600 27.2% 23.7% 15 $100,000-$500,000 443,806 $78,002,555 $2,489,641 16.8% 34.0% 38 Above $500,000 32,283 $53,248,743 $2,513,966 1.2% 23.2% 38 Totals 2,647,579 $229,430,325 $6,511,868 100.0% 100.0% 100
TY 2001 Data from SOI Table B: Full Year Taxable Returns Summary NJ Taxable Income Returns Gross Income Net Charged Tax Returns Income Charged $ in Thousands $ in Thousands Percent Percent Per Under $50,000 1,368,800 $43,772,583 $545,386 53.0% 20.0% 9 $50,000-$100,000 752,700 $58,052,448 $1,063,151 29.1% 26.5% 18 $100,000-$500,000 434,900 $77,603,259 $2,418,460 16.8% 35.4% 42 Above $500,000 28,000 $39,561,316 $1,683,010 1.1% 18.1% 29 Totals 2,584,400 $218,989,606 $5,710,007 100.0% 100.0% 100
TY 2002 Data from SOI Table B: Full Year Taxable Returns Summary NJ Taxable Income Returns Gross Income Net Charged Tax Returns Income Charged $ in Thousands $ in Thousands Percent Percent Per Under $50,000 1,407,000 $45,928,547 $583,415 54.2% 21.6% 10 $50,000-$100,000 730,700 $57,519,199 $1,064,286 28.1% 27.0% 19 $100,000-$500,000 433,900 $77,859,806 $2,426,010 16.7% 36.6% 44 Above $500,000 25,500 $31,667,765 $1,373,295 1.0% 14.9% 25 Totals 2,597,100 $212,975,317 $5,447,006 100.0% 100.0% 100
TY 2003 Data from SOI Table B: Full Year Taxable Returns Summary NJ Taxable Income Returns Gross Income Net Charged Tax Returns Income Charged $ in Thousands $ in Thousands Percent Percent Per Under $50,000 1,403,100 $46,080,301 $560,305 53.6% 21.0% 9 $50,000-$100,000 734,300 $58,178,674 $1,082,323 28.0% 26.6% 19 $100,000-$500,000 454,080 $81,619,513 $2,553,862 17.3% 37.3% 45 Above $500,000 27,025 $33,211,834 $1,446,291 1.0% 15.2% 25 Totals 2,618,505 $219,090,322 $5,642,781 100.0% 100.0% 100