Christie announces 190M cut to employees’ payroll taxes

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Workers will receive a payroll tax cut of up to $87 under a change to temporary disability insurance payroll taxes announced by Gov. Chris Christie on Monday.

Workers will receive a payroll tax cut of up to $87 under a change to temporary disability insurance payroll taxes announced by Gov. Chris Christie on Monday.

Christie gave details of the tax cut at a town hall meeting at Kearfott Guidance & Navigation, a defense contractor in Little Falls, where he also said more he would propose more tax cuts in the future.

“It’s a downpayment on what we’re going to continue to try to do,” Christie said of the payroll tax cut.

The cut was made possible by a new state law that Christie signed in July. Under previous law, employees paid a half-percent tax on the first $29,600, or $148, that employees were paid.

The new law allows the state Department of Labor and Workforce Development to adjust the tax annually. In 2012, it will be lowered from 0.5 percent to 0.2 percent on the first $30,300 that workers are paid, for a maximum of $61.

The change does not affect the amount of temporary disability insurance taxes paid by employers, which is determined in a similar manner to unemployment insurance taxes, and varies for each business.

Over the years, the state government has used temporary disability insurance money to plug holes in the budget. Since 1994, $773 million had been diverted from the fund, according to the Labor Department.

“New Jersey workers have been paying much more into the disability fund than what is needed to keep it solvent. This change is not only fairer to New Jersey workers, it also leaves people with more spending money to put back into our economy,” said Harold J. Wirths, Labor commissioner.

Christie noted in his remarks at Kearfott that he had just recalled earlier in the day that his mother once worked for the company, which has 235 workers.

Christie told the crowd that he focused on cutting government spending when he inherited a budget deficit. He said the state’s success at controlling spending has allowed it to cut taxes, starting with the business tax cuts in this year’s budget and the disability insurance tax Jan. 1.

“What it is is the beginning of moving things in the other direction,” Christie said. “We’re doing that because we really believe in our administration that the government is taking too much of your money.”

He contrasted the 45,000 jobs added in the private sector since he became governor with more than 100,000 in job losses in the decade before he took office.

Christie said the state has traditionally provided property-tax relief with tax rebates, but his administration has put caps on local spending while working to stabilize public employee pension costs.

Christie also said that his job is no more difficult than those of the audience, adding that he has the same opportunities as they do to improve the state. Christie also said he is going to make more hard choices that will allow him to provide more tax relief in the coming months.

He said reducing taxes and regulatory costs will allow businesses to create jobs and allow the state to move forward.

“New Jersey’s comeback is starting, and people all around the country are noticing,” Christie said.

The TDI program serves workers who are injured outside of work. The maximum benefit lasts 26 weeks, for a maximum payment of $559. In 2010, 4.25 million workers paid $316.7 million in TDI taxes and employers paid $208 million.


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