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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsChris Christie breaks a 40 year agreement between PA and NJ to scam money.
http://www.philly.com/philly/business/20161010_Who_s_happy_about_Christie_s_tax-reciprocity_move__Anyone_.html
If you work in South Jersey and commute from Pennsylvania, or vice versa, you'll pay higher wage taxes in 2017.
And South Jersey employers including Subaru, Campbell Soup Co., and Destination Maternity - the latter made a big splash moving from Philadelphia to New Jersey - are furious.
So furious, they're discussing putting million-dollar projects on hold.
Last month, Gov. Christie ended, effective Jan. 1, the Pennsylvania/New Jersey Reciprocal Income Tax Agreement that has been in place for nearly 40 years.
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The PA/NJ Reciprocal Income Tax Agreement was put in place in 1977 and allows New Jersey and Pennsylvania residents to pay income taxes in the state where they live, not where they work.
While Pennsylvania has a low, flat personal-income tax rate of 3.07 percent, New Jersey's ranges from 1.40 percent for incomes under $20,000 to 8.97 percent for incomes over $500,000 - nearly triple Pennsylvania's rate.
The agreement also allows Jersey residents who work in Philadelphia a tax credit against the city wage tax.
So the tax was setup that if you lived in one stated but worked in the other you only paid taxes in the state where you lived. Which if you lived in Pennsylvania but worked in NJ, you did benefit since Pennsylvania has better tax plans.
But this is a punk-ass move by Chris Christie because he knows that it won't affect NJ voters since they aren't the ones being screwed. But businesses have built in South Jersey because they knew they had workers from NJ and Pennsylvania to pick from. But no one from PA will want to work in New Jersey if they have to pay Jersey taxes.
GWC58
(2,678 posts)The Tub-O-Lard, or Turd Ball.
MiniMe
(21,716 posts)Most of the workers in Washington DC live in either Maryland or Virginia. That could affect anybody who lives on a state line.
Glassunion
(10,201 posts)There are roughly 125k people from each state who work in the other state. So... You have folks who live in PA, all the way from central Bucks county, all the way up to the Poconos who commute into NJ daily. But you have the folks in Camden, Gloucester, and Burlington who work in the Philly area. They are going to get screwed too.
I'm actually one of the folks who commute to NJ from PA, and my taxes will increase 6.37%, because I make more than $75k a year and less than $500k (man that's a large bracket). But lets say you live in NJ, and work in Philly, and you make $42k a year. Currently you would be paying 5.25% on your income. Since the deal was scrapped, you will now pay 3.07% to PA, + an additional 3.49% as a non-resident to the city of Philadelphia for a total of 11.81%. Where as I will only have to pay 9.44% even though I make nearly twice as much.
This is a tax on the poor, plain and simple. Add to that the fact that he raised taxes on gas (.23 cents a gallon), plus the fact that a lot of these folks down in south Jersey have to pay $5 to cross the bridge, whereas those of us crossing farther north only pay $1, it is far more expensive to be poor in south Jersey, than wealthy further up state.
Looks like there are going to be a whole lotta jobs opening up in Philly.