New Jersey: Home Of The Taxed

New Jersey’s State/Local Tax Burden Highest in Nation:
Estimated at 11.8% of income, New Jersey’s state/local tax burden percentage is the highest in the country, well above the national average of 9.7%. New Jersey taxpayers pay $6,610 per capita in state and local taxes.

New Jersey Property Taxes: Highest Per Capita in the Nation
New Jersey is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. New Jersey’s localities collected $18,225,594,000 in property taxes in fiscal year 2004, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, New Jersey collected $3,660,000 in property taxes during FY 2004, making its combined state/local property taxes $18,229,254,000. At $2,099, New Jersey’s combined per capita collections were the highest in the nation.

New Jersey’s 2008 Business Tax Climate Ranks 49th
New Jersey ranks 49th in the Tax Foundation’s State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: New York (48th), Pennsylvania (27th) and Delaware (9th).

New Jersey’s Individual Income Tax System
New Jersey’s personal income tax system consists of six brackets and a top rate of 8.97% kicking in at an income level of $500,000. Among states levying personal income taxes, New Jersey’s top rate ranks 6th highest nationally. New Jersey’s 2005 individual income tax collections were $945 per person, which ranked 15th highest nationally.

New Jersey’s Corporate Income Tax System
New Jersey’s corporate tax structure consists of a flat 9% on corporate income. However, corporations with total net income of $100,000 or less pay 7.5% and corporations with total net income of $50,000 or under pay 6.5%. Among states levying corporate income taxes, New Jersey’s top tax rate ranks 7th highest nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $287.51 per capita, ranking the state 6th highest nationally.

Federal Tax Burdens and Expenditures: New Jersey is a Donor State
New Jersey taxpayers receive less federal funding per dollar of federal taxes paid than any other state. Per dollar of federal tax paid in 2005, New Jersey citizens received approximately $0.61 in the way of federal spending. This represents a decline from 1995 when New Jersey received $0.68 per dollar of taxes in federal spending (second lowest). Neighboring states and the amount of federal spending they received per dollar of federal taxation paid were as follows: New York ($0.79), Pennsylvania ($1.07), and Delaware ($0.77).

Now that the bad news is out in the open, what do we do from here? We are taxing our people (income and property) and businesses to death. We are losing people and businesses to other states. We need to elect fiscally conservative leaders who will act, and act quickly to reverse these policies that are killing our state.

Reform taxes. Does it make sense that New Jersey tax law penalizes businesses that hire workers and build facilities here? It certainly doesn’t. Let’s overhaul the corporation business tax so that it no longer gives a break to out-of- state companies that merely sell goods and services in New Jersey while more heavily taxing businesses that have operations here.

Reduce energy costs. The state must reduce energy costs, not raise them. Under New Jersey’s energy master plan, a whopping 20 percent of a company’s total electric bill would go toward government taxes and surcharges. This is not acceptable.

Impose a moratorium on new regulations. The state should impose a moratorium on the issuance of new rules by the Department of Environmental Protection. Excessive regulations are a costly but hidden tax on the state’s businesses. The DEP last year issued 2,000 pages of new regulations, including one that requires the owners of tidal waterfront property — even chemical plants — to provide public “beach” access.

Support manufacturing. It pays to support a sector of the economy that pays above-average wages and benefits and supports half a million jobs. Let’s start with a 20 percent tax credit for manufacturers that invest in new equipment and facilities.

Establish one-stop-shopping. Other states make it easy for businesses to set up shop with “one- stop-shopping” that gives them a single point of access for all state permits and programs. New Jersey should do the same.

Stop the mandates. It’s time to stop the mandates. In May, New Jersey became the second state in to require paid family leave for all employees. The six week paid-leave program was strongly opposed by business. Mandates like this will only drive more employers — and jobs — out of this state.

It’s time New Jersey embraced business as its economic partner, as other states have done. It is time to ease the tax burden on those that live and work in New Jersey.  Only through following these conservative fiscal initiatives can New Jersey begin to attract and retain people and businesses to live and set-up shop (or stay) in the great state of New Jersey. Vote for those politicians that will follow these basic guidelines to return New Jersey to prosperity and growth.