Christie Todd Whitman on Tax Reform Former Director of the E.P.A (Pres. Bush Cabinet); Former Republican Governor (NJ)

People need certainty that taxes won't be raised

A: No. It's almost 2,000 pages.

Q: Two thousand pages. There's $8 billion worth of nonsense in this, a small part of the $1.1 trillion that this deficit represents.

A: Right.

Q: But what do you think should happen to the $8 billion of all the other goodies?

A: Well, I wish they had not put them in. And Republicans are behaving just as badly as Democrats in getting the pork into this bill. But, overall, we need those tax cuts. People need the certainty that they are going to see that they're not have their taxes raised. So, that is the most important thing.

Reduced state income tax by 30%

Cut business taxes and other taxes

[Governor Whitman’s tax] cuts have accounted for a cumulative total of $11 billion in savings to New Jerseyans and include:
• Veterans’ Deduction - Supported passage of a constitutional amendment increasing the property tax deduction on personal income taxes for veterans from $50 to $250 over four years.
• Business Tax Cuts - Enacted a series of business tax cuts that has stimulated the economy and will assure the continuation of existing jobs and the creation of new jobs.
• Energy Tax Reform - Cut energy taxes for every utility customer by 45% over a five-year period beginning in 1999.
• Small Business Tax - Enacted the region’s lowest corporate tax rate for small business.
• Corporation Tax - Lowered the corporate business tax rate to 9%.
• Yellow Pages Tax - Eliminated the sales tax on “yellow pages” advertising.

Cut NJ taxes by 30%; zero taxes for 380,000 poor

[Governor Whitman’s tax cuts] include:
• 30% Tax Cut - Cut the state income tax three times to fulfill the promise to cut taxes 30% for most New Jerseyans in three installments.
• Off the Tax Rolls- Eliminated state income taxes altogether for 380,000 New Jerseyans earning $7,500 or less. Signed plan to eliminate state income taxes for another 320,000 New Jerseyans earning up to $20,000, phased in over three years.

Cut property taxes, rebated payments

[Whitman’s tax cuts include]:
• Property Tax Deduction - Enacted property tax deduction act to restore the property tax deduction for personal income.
• Property Tax Rebates - Proposed and enacted a plan to return $1 billion annually to NJ residents in property tax rebates, phased in over five years.
• Senior Citizen Property Tax Freeze - Enacted legislation that will in effect freeze property tax rates at 1998 levels for qualified senior citizens and people with disabilities.

Taxpayers should benefit first and most from budget surplus

No national sales tax or VAT.

State tax policy is closely linked to federal policy. 36 states currently use either federal income or federal tax liability as the state tax base for personal income taxes. It is critical that Congress and the administration do not enact tax reform in a vacuum, but in consultation and in partnership with the nation’s Governors.
• National Sales or Value-Added Tax The nation’s Governors oppose a national sales or transactional value-added tax. Such taxes would intrude into a tax area that has traditionally been reserved for and relied on by state and local governments. If enacted, either of these taxes would seriously threaten the ability of state and local governments to maintain their tax base.
• Current Income Tax If Congress decides to reform the current tax system, they should reduce the complexity of current income taxes; increase incentives to work, save, and invest; and increase efficiency and fairness. As part of any reform of the current income tax, the nation’s Governors would oppose any modification to the deductibility of state income taxes, property taxes, and the interest on state and local bonds.
• Transition If major tax reform is enacted, it should not be implemented for at least three years, to give states ample time to adjust their own tax systems.
• Information Needs of the StatesThe ability of states to tax various revenue sources depends to a large extent on information that only the federal government can collect. This is becoming much more important given the complexity of both the international and domestic economies in tracing where goods and income are generated. It is critical that the federal government separate tax reform per se from the information that is collected from individuals, businesses, and corporations with respect to income generated. The data collection role of the federal government must be developed in partnership with state and local governments.