Dear Editor:
Recently the McGreevey administration proposed that losses incurred by corporations in one year be recovered (on the NJ tax return) through credits against gains in future years (at least to the extent of 50 percent.)
This proposed treatment come close to being fair as the state has collected taxes on corporation profits in good times but cuts off corporate net losses in lean years.
Of course us retirees who have incurred net losses on our investments over the past few years received no such fair treatment when filing the state Schedule B (sale of investments.)
Through its peculiar accounting procedures, New Jersey collects taxes on individual net gains from investments – and interest, dividends, etc. – but gives no credit for loses. This is so even though the declining value investments pay interest, dividends, etc., which are taxable to the retired taxpayer who files NJ-1040. This unfairness is most evident if one considers that taxpayer’ gains from sales of investments in future years are 100 percent taxable.
One may be tempted to say that retirees who receive interest and dividends are fat cats. We are not fat cats; we have saved from our earnings (which like FICA withholding, were taxed) and invested the moneys to help in our old age instead of becoming a burden to our children and/or society.
It is time that our governor acted in a fair manner by allowing capital losses to be offset against other taxable income. Frank X. Landrigan