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A current proposal in the Legislature would invest in the cities and towns of NJ the ability to levy income taxes on residents as well as local sales taxes. The idea is being put forward as a measure to help manage property taxes and could effectively lower property taxes by shifting the focus of the local tax burden.
While this seems like a non-starter to me on the surface, I can actually see the merit where it would greatly benefit some cities and towns to shift the burden from property taxes to other revenue streams.
One example would be a town with significant numbers of apartments or multi-family homes. On a per person basis, these places pay far less in total property tax compared to a single family home while the people who live there still receive all of the same benefits. I could see a town instituting an income tax to alleviate the burden apartment renters place on the property owners of the town.
Another example would be a town like Collingswood that continually invests large amounts of resources into the revitalization and maintenance of its downtown. The hope is that the ancilliary benefit of being a destination town will bleed out and help property values. However, it generally just acts as a drain on the town. Being able to levy a sales tax would allow a local business district like in Collingswood to become self-supporting and relieving residents of the burden of supporting the business district via property taxes.
I would guess sales tax is not going to work if the neighboring towns don't do it as well. People will just shop in the other towns. This is also going to hurt businesses. Not only from the obvious fact that things will cost more, but now they to track this and they are probably not set up to do that currently.
The absolute biggest fear would be that they would add in these taxes and not lower property taxes.
PA has local income taxes. it seems to work ok. "property taxes" are generally only for school taxes, and maybe some city services. but largely, the income tax is what dictates the city services. it seems fair enough to me.
the problem i see with local sales taxes, although manderly says people can just shop in the next town over....what about areas with well-established businesses? like, where malls are located...it's unlikely the mall is going to pick up and move it's stores...and customers can only go so far. my cynical side says that places with very well-established businesses would take advantage of this semi-trapped feeling and levy a small sales tax just because they can get away with it. maybe that's too cynical?
I think towns with big malls would probably make out very well by not having a tax. They would have an even bigger draw from towns that did have the tax.
NJGOAT, you well know my feelings on what direction Collingswood needs to go to bring people in and spend money. Before you up sales taxes, make sure you are upping them on places people want to be. Save restaurants, Collingswood has a downtown that lacks anything to spend your money on that you can't get at the mall just 8 minutes away.
I think towns with big malls would probably make out very well by not having a tax. They would have an even bigger draw from towns that did have the tax.
but...city politicians that need some extra cash that drive by the garden state mall and see a full parking lot 6 days a week would have trouble resisting....
but...city politicians that need some extra cash that drive by the garden state mall and see a full parking lot 6 days a week would have trouble resisting....
I'm sure they would pay someone to do a calculation that compared a bigger draw of customers with no tax vs. a tax and possibly losing customers.
We should start a consulting firm to offer just that service.
I'm sure they would pay someone to do a calculation that compared a bigger draw of customers with no tax vs. a tax and possibly losing customers.
We should start a consulting firm to offer just that service.
or, they would meet with neighboring mayors and all agree to raise their sales taxes to the same amounts, complete with performing the review you suggest through their friends, who they pay extra to give them the results that show the BENEFITS of a sales tax! hehehe. NJ is making me very cynical....
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