TRENTON, N.J. – New Jersey Democrats are eyeing another dubious “first” for the Garden State this week.
On Tuesday, the Democrat-controlled Senate and Assembly Budget Committees respectively advanced S-2746/A-4202, legislation designed to increase New Jersey’s corporate tax rate.
The full New Jersey legislature is scheduled to consider the measures this Thursday.
The new corporate rate would come in between 11.5% (for income over $1 million) and 13% (over $25 million). The current rate is 9%.
At 13%? New Jersey would have New Jersey’s highest business corporate rate, bringing New Jersey businesses’ combined rate to 31% when the 21% federal rate is added to the total.
According to The Tax Foundation, “[t]his would stand out quite unfavorably to the average rates among European (18.35 percent) and African nations (28.2 percent) and rank just below the South American average tax rate of 32.93 percent. Large New Jersey corporations would pay a rate six points higher—and small corporations four and a half points higher—than France’s planned 25 percent corporate tax rate.”
“We want businesses to set up shop and thrive in New Jersey. Our businesses are the life-support of the economy, and these jobs help local workers provide for their families. Dramatic tax increases will hurt the families, workers, and entrepreneurs that hope to make New Jersey home,” opined AFP-NJ State Director Erica Jedynak. “Due to the nation’s highest property taxes, New Jersey families are already being taxed into exile and raising the corporate tax rate could very well serve as the death blow to the New Jersey economy. Now is the time for lawmakers in Trenton to ensure that our job creators remain hiring and open for business. Instead of maintaining the failed status quo, New Jersey lawmakers should work toward practical solutions that decrease taxes in our state and increase prosperity.”
A Democrat battle over income tax hikes vs. corporate tax hikes could end in a government shutdown.
Governor Murphy prefers an income tax bump, with the rates resting between 8.97% and 10.75% for income earners fetching over $1 million annually.
Senate President Stephen Sweeney and Assembly Speaker Craig Coughlin (D) prefer the corporate tax route.
New Jersey is already one of America’s most taxed states and it consistently ranks as boasting one of the worst business climates in the United States.