How NJ’s ‘Hidden’ Taxes Compare to Other States
They're considered an easier and more palatable way to collect revenue from residents — but are you aware of just how many fees are tacked on to your everyday purchases?
Just last month, the grand total was boosted by a spike in the gas tax of 4.3 cents per gallon. That's in addition to the 22.6-cent increase approved in 2016.
The added charge for gasoline is one of the many excise taxes that exist not only in New Jersey but across the country. Added to specific products such as tobacco and alcohol, they're sometimes known as "sin" taxes.
In a recent report from the Tax Foundation, released before the latest gas-tax hikes, it was found New Jersey residents shell out $445 per year in excise taxes, resulting in about $4 billion in revenue.
"It really does kind of escape notice ... they tend to be hidden," said Joe Henchman, the Tax Foundation's executive vice president. "But when you add it up, it's quite a big bite."
Many excise taxes are regressive, Henchman said, meaning they pose a bigger burden on individuals with lower incomes.
In the analysis, New Jersey's per-capita excise taxes ranked 35th-highest in the country. Pennsylvania ranked 11th; New York, 13th.
Henchman said excise taxes are typically higher than the general sales tax, and if their collections are devoted to something positive, they may be easier to swallow.
In New Jersey, for example, the gas tax is meant to fund road improvements. State lawmakers, meanwhile, are pushing to devote more of New Jersey's cigarette tax revenue to smoking cessation programs.