New Jersey has no alternative to revenue from taxes on estates and inheritances, said Gordon MacInnes, a former Democratic state senator who is president of New Jersey Policy Perspective, a Trenton group that advocates higher spending.
“Talking about further reducing our out-of-balance budget by cutting revenues makes no sense at all,” MacInnes said. If finances were stronger, “it would make sense to increase the threshold for triggering the estate tax.”
Assemblyman Declan O’Scanlon Jr., a Republican from Little Silver, is co-sponsoring a bill to do just that, and to eliminate the inheritance penalty. The policies would appeal, he said, to high-wealth retirees with investment income.
“It isn’t just the death taxes that we lose when someone leaves,” O’Scanlon said. “We lose the income tax from the time they change their residence to the time they die, and those could be the highest-income years in these people’s lives.”
New Jersey lawmakers haven’t voted on any of 20 proposals to ease taxes on assets of the dead and their heirs.
Barbey, the Ridgewood resident, has set a Dec. 31 deadline: The taxes ease or she moves.
Single with no children, she wants to leave her money to two nephews and a niece. New Jersey applies rates according to how closely a deceased was related to heirs, taking more for more distant relatives.
“I’ve been an investor for 30 years -- I did everything I’m supposed to do so I don’t become a ward of the state,” said Barbey, who worked in publishing and marketing. “If I die today, the stinking state is coming in.”