In an op-ed published on NJ.com and in the Newark Star-Ledger on June 17th, GSI President Regina Egea tackles the proposal offered by Senate President Steve Sweeney to raise New Jersey’s corporate tax to the highest in the nation. Such a move, Ms. Egea argues citing a competitiveness study researched for GSI by EY, would severely hamper the state’s ability to retain and attract businesses.
In an op-ed published on APP.com and six Gannett New Jersey newspapers, GSI President Regina Egea taps her years of experience in the private sector as well as in local and state government to offer real opportunities to reform our state government and return property tax savings where it belongs - to the taxpayers.
Even if New Jersey dramatically cuts the corporate income tax, it would still have to slice the sales tax to compete effectively with lower-tax states. While New Jersey looks at increasing taxes, its competitor states are looking at how to decrease them as a way to boost business and industry. Increasing taxes will only further the climb required to grow the economy.
Those are some of the findings from the new report released by the Garden State Initiative. The report details New Jersey’s business competitiveness compared with five states: Connecticut, New York, Pennsylvania, North Carolina and Ohio. The study delves into commercial and manufacturing industries that face off against each other across state lines.
Click here to download a PDF of the full report.
Economists, tax experts, and legislators engaged in a spirited debate about what it will take to spur growth in New Jersey at GSI's Economic Policy Forum on May 2. The event focused on original research done for GSI by tax analysts at EY.
Thank you to our panelists:
Dr. Arthur B. Laffer, Dr. James W. Wetlzer, James Freeman, Tom Byne, State Senator Steve Oroho, Assemblyman Louis Greenwald, Daniel J. Geltrude, CPA, and our moderator, Deborah Kostroun.
Read the report here.
Gov. Phil Murphy in his recent budget address touted Massachusetts as the iconic role model for New Jersey’s economic aspirations. We wonder if, by singling out Massachusetts, Murphy was proposing halving New Jersey’s highest marginal personal income tax from its current almost 10 percent rate (fifth-highest in the nation) to Massachusetts’ 5 percent rate. Or, maybe he was suggesting New Jersey cut its current highest corporate income tax rate from 9 percent to 8 percent. Or did he mean we should emulate Massachusetts’s flat tax?
State Senate President Steve Sweeney's proposal to put a 3-percentage-point surcharge on corporate taxes means N.J. would be tied with Iowa for the highest state rate in the nation. Sweeney sees raising the corporate tax rate from 9% to 12% as a way to avoid implementing the "millionaire's tax," which was a cornerstone of Gov. Phil Murphy's campaign. Murphy has said he would consider the hike in the corporate tax in addition to the "millionaire's tax" and not just as an alternative.
Let’s applaud Gov. Phil Murphy for putting job creation on his agenda. The governor signed an executive order establishing a Jobs and Economic Opportunity Council to provide advice and recommendations “for stimulating job growth and workforce development.” It’s hard not to notice, though, the lack of any individuals from the private sector on the council.
No matter what this year’s gubernatorial candidates may say, painless solutions to New Jersey’s fiscal challenges don’t exist. The state’s budget may be balanced on a “cash” basis, but a massive structural deficit lurks beneath. New Jersey’s property taxes, already the highest in the nation, are being driven up further by the state’s pension burden and escalating health-care costs for government workers. A useful comparison is Connecticut, which has tried unsuccessfully to tax its way out of a similar set of problems.
Connecticut provides a cautionary tale for the next governor of New Jersey, according to a report from the newly launched Garden State Initiative. With its “severe pension underfunding, a high tax burden and politically powerful government unions,” New Jersey is facing challenges that have already placed it near the bottom of national rankings of fiscal health, according to the author of the report, Stephen D. Eide of the Manhattan Institute. One of the only states to fare worse in recent years has been Connecticut, which mirrors New Jersey in many ways.
Tax policy is one of the major themes of the campaign for governor of New Jersey. Since the Great Recession, the Garden State has cut some taxes and avoided raising income taxes, which has helped its recovery. Connecticut, however, boosted already-high taxes, counted on economic growth that didn’t materialize and now faces the repercussions, according to the 16-page report, “Connecticut’s Fiscal Crisis is a Cautionary Tale for New Jersey.”
Click here to download the PDF of the full report.
New Jersey has a serious fiscal crisis on its hands, a crisis with two interrelated culprits: 1) painfully high taxes driven by 2) unsustainable public spending which includes out of control pensions reflected in unfunded liabilities. Our collective inaction is driving both residents and businesses to flee elsewhere. Even while the tax burden grows, essential services are increasingly being crowded out due to rising costs associated with the state’s public workforce.
The costs to New Jersey’s citizens and businesses are increasing by the year. They feel frustrated, marginalized, and powerless. With New Jersey’s tax climate for business ranked 49th by the Tax Foundation, and a ranking of 48th by Forbes magazine when examining the best and worst state tax burdens, it is no wonder that according to recent Gallup and Monmouth polls nearly 50 percent of New Jersey’s residents want to leave the state.