It has become a tradition for Chris Christie, Governor of the state of New Jersey, to annually revise with his cabinet the taxes that are imposed on people who have won large sums from the lottery and those that are levied on casinos.
They also tend to discuss various ways in which the money that is deposited to the treasury may be spend.
This year, Sen. Ronald Rice and his colleague Sen. Paul Sarlo proposed two different approaches to local taxpayers. Rice prepared a bill that would increase taxes imposed on lottery winnings by 0.5%. If New Jersey’s legislative body approves it, everyone who wins over $600 will need to pay the respective tax.
Sen. Rice did not specify how much could be raised, but he suggested that the money should be spent on the launch of some after-school programs in urban areas and their support.
Currently, people who hit major winnings from the lottery are supposed to pay a 10.8% tax. The Tax Foundation, a Washington-based non-partisan tax research group, claimed that residents of New Jersey are paying the highest lottery levies in the country. However, those living in New York City need to pay a 8.8% tax and an additional 3.8% one.
It seems that the state of Pennsylvania does not imposes taxes on its lottery winners. Yet, winnings are considered to be ordinary income, hence a 39.6% tax is levied on these.
Sen. Sarlo’s plan, on the other hand, concerns casinos and more particularly the new ones. According to him, a 66% tax should be imposed on casino venues. He admitted that the figure he proposed might be a bit too high, but he stated that new gambling venues need to pay more than the already established ones in Atlantic City, New Jersey’s gambling Mecca. A 9.25% tax is imposed, currently.
In case Sarlo’s plan is approved by legislators, the money raised will be distributed between the Casino Reinvestment Development Authority and the Hackensack Meadowlands Tax Sharing Stabilization Fund.
The first agency was established back in 1984. Since then, it has spent more than $1.5 billion on various projects in Atlantic City and $300 million in other cities within the territory of the state.
The activities of the Meadowlands Commission, on the other hand, often meet strong disapproval, due to the fact that it uses the money certain communities pay, in order to be allowed to build something, to compensate communities that are against new developments in wetlands.
Although both Rice’s and Sarlo’s bills seem well-intended, they are not particularly likely to be enacted any time soon. It appears that Rice’s suggestion will not be welcomed by lottery winners and residents of suburban areas, unless their after-school activities are supported, as well.
As for Sarlo’s bill, some casino owners might not be particularly happy to pay a 66% tax. Yet, considering the fact that some states have levied a 60% one, his idea may succeed at some point in time and after some changes are made.
