If you win, take the cash option. Taxes are probably going up on the rich next year.
The jackpot is now up to $550 million.
Under current tax law, if you take the 30 year annuity your annual $18,333,333 will be taxed $4,583,333 by the IRS and $1,980,000 by the State if you live in New Jersey, for a net annual payment of $11,770,000.
If you take the $360,200,000 cash jackpot, the feds will take $90,050,000 and New Jersey will take $38,901,600, leaving you with a net payment of $231,248,400.
U. S. Senator Bob Menendez made his last five years tax returns and U.S. Senate Financial Disclosure reports available to the media for inspection today at his campaign headquarters in New Brunswick.
In 2011 Menendez’s reported wages of $156,250 from his U.S. Senate salary of $174,000. His representatives explained that $17,750 of his salary went into a deferred retirement account and was not reportable as wages. He also reported $15,282 in taxable income from a 5 unit residential rental property in Union City, $292 in interest and $50 in dividends for total taxable income of $171,872. He deducted $6,436 in Employee Business Expenses.
The senator paid $36,961 in federal income taxes (21.4%) and $9,889 in NJ income taxes (5.2%) in 2011.
As a tenant in his North Bergen home, Menendez does not pay property taxes. However he did pay $9,669 in property taxes on the Union City investment property he purchased for $47,500 in the 1970’s.
According to Menendez’s 2010 and 2009 U.S. Senate Financial Disclosure Reports he had an agreement with New American Library (NAL), a division of Penguin Group (USA) wherein he would receive a $50,000 advance of royalties to be split with his co-author, Peter Eisner, for their book, Growing American Roots: Why Our Nation Will Thrive as Our Largest Minority Flourishes. $25,000 was to be paid upon signing the agreement with NAL in January 2009 and $25,000 upon delivery of the manuscript for the book that was published in October of 2009.
Menendez’s agreement with Eisner, who’s name did not appear as a co-author on the book cover or title page, was that as ghost writer he would receive the first $50,000. Menendez would receive the second $50,000 and that the two would split future royalties which would range from 7.5% to 12.5% of sales on a 50-50 basis.
No income from the book was reported on Menendez’s 2011, 2010 or 2009 tax returns.
“Bob didn’t make a dime on the book, that’s what he told me,” said campaign advisor Brad Lawrence.
Menendez 2012 Communications Director Paul Brubaker said that Eisner received the first $50,000 and that sales of the book, which is selling now on Amazon for $1.38 (hardcover), were insufficient for additional royalties to be paid.
Brubaker and Lawrence did not know if Menendez paid Eisner after receiving payment from NAL, which would have triggered a tax reporting requirement, or if NAL paid Eisner directly in which case there would have been no tax reporting necessary for the senator.
A call to Penguin Group (USA) for clarification has not been returned.
New Jersey’s GOP nominee for U.S. Senate and his wife earned $437,500 in 2011, according to tax returns made available to the press by the Kyrillos for Senate campaign this afternoon.
Joe and Susan Kyrillos paid $106,564 in federal income taxes and $24,299 in NJ State income taxes on the $289,728 portion of their income that was taxable. Property taxes on their Middletown home are almost $20,000.
The couple jointly reported wages of $133,738. $49,000 of those wages are the senator’s legislative salary. The senator earned gross revenue of $150,000 and a net profit of $109,299 from his commercial real estate business. Mrs. Kyrillos earned gross revenues of $255,364 and a net profit of $197,532 from her insurance consulting business.
The couple did not disclose their W-2s or 1099s which would have revealed the source of their incomes.
In 2010 they earned gross income of $365,509, $214,072 of it taxable. They paid $95,811 in state and federal income taxes that year. In 2009 their gross income was $381,052, $239,582 taxable. Their state and federal income tax bill was $177,820 in 09.
The Kyrillos campaign announced that the senator would make three years tax returns available yesterday afternoon. A few hours later, U.S. Senator Bob Menendez, the Democratic incumbent, announced that he would disclose five years of returns next week. Menendez has never before released tax returns in his six years in the U.S. Senate.
“I congratulate Senator Menendez for following Senator Kyrillos’ lead and agreeing to release more than one tax return,” said Kyrillos Campaign Manager Chapin Fay. “It’s clear had Senator Kyrillos not led this charge, Senator Menendez would have continued to keep New Jerseyans in the dark. Joe will bring this same agenda of good government and transparency to the United States Senate and bring an end to backroom deal-making and special interest influence.”
According to The Star Ledger, the Menendez campaign issued the following statement regarding the Kyrillos returns:
“Joe Kyrillos’s personal finances raise more questions than his tax returns can answer. Kyrillos makes a substantial income in addition to what he is paid as a public official, and it is incumbent upon him to disclose the nature of the work he does at Newport Capital, Kyrillos Real Estate and any other outside enterprises in which he is involved,” Menendez spokesman Michael Soliman said in the statement. “Without knowing the nature of Joe Kyrillos’ reported outside income, New Jerseyans are left with no assurances that this income is entirely unrelated to his public duties.”
Governor Chris Christie took his Endless Summer tax relief tour to Long Beach Island this afternoon.
About half way through this APP video the governor addresses municipal consolidation incentives as a method the state is providing to reduce property taxes. Chrisite is laugh out loud funny in mimicking public opposition to consoldiations.
A Monmouth University/Asbury Park Press poll released this morning indicates that Governor Christie’s approval numbers remain above 50% in New Jersey. 53% of registered voters approve of the job Christie is doing, compared to 35% that do not.
61% of Jersey voters think its a great idea that Mitt Romney tab Christie to give the keynote address at the Republican National Convention next month.
Christie has been promoting his bipartisan accomplishments in his out of state travels, but Jerseyans aren’t buying it. 31% of voters say that Christie and the Democratic leadership is working well together, 53% say they are not playing nice. 58% blame Christie and the Democrats equally.
The Democratic legislatures approval ratings remain in the tank, 35%-43%.
A majority of voters think it is wise to wait for state revenues to improve before cutting taxes.
Governor Chris Christie told an audience at the Brookings Institute this morning that the U.S. economy will make Europe look like a picnic if our national leaders continue to play politics with the economy and look only as far as their own terms, rather than tell voters the truth.
Christie was also critical of New Jersey’s Democratic Legislature for failing to provide tax relief in order to make New Jersey more competitive with its neighboring states.
The Governor said that New Jersey voters have a sense of humor as evidenced by electing a conservative Republican governor while retaining a Democratic legislature. “I think they just wanted to see what would happen,” Christie said.
Christie’s entire address to Brookings can be viewed here.
Governor Chris Christie has taken to the town hall stump declaring that the Corzine Democrats are back.
“In the last couple weeks, we’ve seen an ugly type of Democrat start to rear its head again,” Christie said during a town hall last week. “I think you thought you had slayed this type of Democrat in 2009 — that you had taken the wooden stake and out it through this type of democrats heart. But I am here to tell you today that I fear this type of Democrat has returned to the state legislature. You know what kind of Democrat I’m talking about: A Corzine Democrat.”
The governor will likely expand on the Corzine Democrats theme at his town hall meeting in Brick this afternoon, as he did last evening in his statement about the budget passed by the Democratic State Legislature yesterday:
“With today’s budget, Corzine Democrats reversed course and sent a loud and clear signal that they want to go back to the eight years prior to my administration when taxes and fees were raised every 25 days. After two years without raising taxes, the only way to feed the Corzine Democrats’ obsession is to hold tax relief hostage. I will not allow New Jersey to go back to the same failed policies that nearly put our state over a fiscal cliff. Tax relief for our hardworking families is long overdue and that is exactly what I will continue fighting for.”
But the budget the Democrats passed doesn’t raise taxes once every 25 days. It doesn’t raise taxes any day. It also doesn’t reduce income taxes as Christie’s budget proposed. Nor does it reduce property taxes as the proposal that Senate President Steve Sweeney reneged on would have done.
The budget that the Democrats passed spends $400 million less than the budget Christie proposed.
Christie’s budget would have increased spending 8% with a phased in 10% income tax reduction. It relies heavily on one shot gimmicks and increased borrowing. Christie’s revenue projections, which the Democrats have acceptted, are based upon extremely optimistic assumptions that seem to have little grounding in reality. New Jersey’s economy would have to suddenly start growing faster than the rest of the country in order for Christie’s revenue projections to come close. That sounds a lot like the fiscal cliff that the Whitman/DiFranceso/Bennett Republicans drove New Jersey over in the 1990’s until New Jersey voters kicked them out of power in 2003.
What do Florida, New Hampshire and Washington state have in common?
They’re among nine states that not only weathered the worst economic recession of our generation, but found ways to make their economies stronger, attract new people and create jobs when the rest of the nation floundered.
From 2001 to 2010, these nine states saw employment increase by 5.4 percent when the rest of the country remained stagnant.
What do these states have in common that allows them to grow jobs during horrific economic times?
No income tax.
In New Jersey, we’re on our way to replicating the job-creating economic successes of these “prime nine” states, even though we’re still among the “maligned nine” states with the highest income taxes.
The tax-free states grew employment by 5.4 percent, while tax-heavy states saw jobs decline by 1.7 percent.
That’s why Gov. Christie is proposing to cut income taxes for everyone. It will keep money in people’s pockets and help bring back the jobs that disappeared last decade as Trenton taxed and spent the state into economic ruin.
The Wall Street Journal recently called legislative proposals in other states to cut the income tax good “long-term growth” and attempts to use additional income tax revenue to relieve property taxes “short-term politics.”
It’s not even good short-term politics. Remember what happened to Jon Corzine in 2009 when he raised income taxes? He was one of nearly 120,000 New Jerseyans who lost a job that year.
Franklin D. Roosevelt, who knew something about emerging from horrific economic times, once said: “Do something. If it works, do more of it. If it doesn’t, do something else.”
New Jersey has repeatedly tried raising taxes to relieve property taxes. It has never worked. In fact, the income tax itself began as a way to reduce property taxes. Do you know anyone whose property taxes went down since 1976?
New Jersey lost an entire decade (and 156,000 jobs) proving you can’t lower one tax by raising another. Taxes increased by $11 billion from 2002 to 2009, and nearly every time they increased a tax, Trenton politicians promised it would relieve property taxes, yet the property tax burden increased 6 percent per year and 60 percent cumulatively from 2002 to 2010.
Remember when Trenton politicians shut down the state to raise the sales tax in 2006 to offer “historic” levels of property tax relief? It didn’t work. The higher sales tax remains, but the property tax relief was history after just one year.
We need to stop doing what doesn’t work. That’s why we ended those failed tactics and launched the most aggressive and effective assault on property taxes in New Jersey history.
We put a tight cap on property taxes, saved property taxpayers $120 billion over the next 30 years through pension and health care reform, and we are working to do more, such as ending the payout for workers’ unused sick and vacation time and allowing towns to save money by opting out of Civil Service.
Our comprehensive approach to tax reform has businesses and homeowners optimistic about our state’s future for the first time in several years.
If we continue to do what has been working, we will continue to create more private-sector jobs in addition to the 60,000 that have been added in the past two years.
Adding jobs won’t just improve our unemployment rate, but likely will achieve precisely what short-sighted critics of Gov. Chris Christie’s income tax cut say it won’t: property tax relief.
Raising other taxes has not lowered property taxes, but reducing the income tax may because it will keep forcing government to spend within its means while encouraging businesses to create jobs in New Jersey.
More businesses and jobs in our economy means a greater share of the tax burden is shifted away from property taxpayers.
Many other states have seen the wisdom of low income tax rates. They know that reducing the income tax burden creates jobs and builds a strong economic foundation. I’m eager to see New Jersey follow suit.
In the last two years, New Jersey has added more than 62,000 private-sector jobs. And our Economic Outlook Rank has improved from 48th to 45th this year, according to the American Legislative Exchange Council.
Our plan to make New Jersey affordable and create jobs is working. We can’t stop doing what is working. We need to do more.
By Assemblyman Declan O’Scanlon, Republican Budget Officer
It’s a simple question loaded with political appeal: “With so many people hurting, and income disparities rising, shouldn’t we ask New Jersey’s millionaires to a ‘fair share’ in taxes?”
OK. What’s a “fair” share?If the current share of state income tax paid by the top 1% of New Jersey’s taxpayers — about 37 percent — isn’t high enough, what is?Would 80 percent be fair?90 percent?Taxpayers earning $1 million pay an effective tax rate this is about four times what taxpayers earning $100,000 pay.When and how will we know when we’ve achieved “fairness”?
Unfortunately, intense partisanship feeding on visceral emotions has made it virtually impossible to have a rational conversation about taxes in America.As a senior member of the State Assembly’s Budget Committee, I think those of us in positions of leadership have a responsibility to do more than stoke emotions, and instead adopt tax policies that generate the revenue needed to support the State’s budget priorities on a fair and sustainable basis.
Piling taxes on the “rich” may be great politics, but it’s lousy public policy.New Jersey already has a “progressive” income tax system which, thanks to high-income households receiving a greater proportion of their income from investments and capital gains, has made our revenue base highly volatile.Additionally increasing our relative reliance on high-income taxpayers will increase volatility, making it more difficult to engage in prudent long-term financial planning.
Most experts believe increased volatility is a problem because fiscal stability is a condition precedent to sound policymaking.Wild fluctuations in revenues fuel an inefficient boom-and-bust approach to budget-making that mismanages popular expectations. The impact of emergent budget cuts on New Jersey residents is regressive – those at middle and lower income levels experience the pain of budget cuts disproportionately since they more often benefit from state programs.
Some editorialists have suggested Governor Cuomo’s recent decision to embrace higher rates for high income New Yorkers should serve as an example for New Jersey.Perhaps they should read the fine print.New York’s “tax increase” is no such thing.New York’s current high rate is 8.97%, the same as New Jersey’s.Instead of letting the rate go down to 6.85%, as scheduled, Cuomo is saying he’ll let the rate fall to 8.82% for taxpayers at $2 million or more, but let the rate fall to 6.85% for taxpayers between $300,000 and $2 million.Everyone in New York will get a tax cut, but folks above $2 million will get less of a tax cut than they had expected.If that’s the standard of “fairness,” maybe the editorialists are right and we should follow New York’s example!Here’s the critical point: the top marginal rate in New York will soon fall below the top rate in New Jersey; that’s not good news for our competitive position.
New Jersey Treasury’s Chief Economist’s review of national IRS data confirmed a statistical connection between tax increases enacted under former Governor McGreevy and an increase of affluent taxpayers who moved out of, or never moved into, New Jersey.The Chief Economist also conducted a survey confirming a significant proportion of tax advisors had discussed moving out of New Jersey with their relatively affluent clients.Contrary to the often inaccurate summaries in the popular press, the study and the separate survey were modest in scope and merely confirmed what we already know: yes, Virginia, taxes matter.
Are they the only competitive consideration? Absolutely not. Infrastructure, regulations, climate, educational levels and other factors play a major role.But there’s no denying taxes figure into investment and location decisions.
Instead of asking “what’s fair?” we should be asking “what’s in our long-term self-interest?”I suggest it’s in New Jersey’s self-interest to pursue policies that support sustainable and growing revenue collections over time.Although New Jersey cannot expect to compete globally on the basis of low taxes alone, we should avoid negative “outlier” status and with it the kind of reputation that once prevented New Jersey from getting into the starting blocks when companies and leaders make site selections.
