ATR Opposes Tax-Hiking New Jersey Assembly & Senate Budget Counter-Proposal
June 21, 2018
From: Americans for Tax Reform
To: New Jersey State Senate and Assembly
Dear Senators and Members of the Assembly,
I write to you on behalf of Americans for Tax Reform (ATR) in ardent opposition to tax hikes in the budget package being put forward by legislative leadership, especially S-2746/A-4202. Their proposal counters Governor Murphy’s tax-filled executive budget proposal by offering a different tax hike package that keeps New Jersey on the same disastrous path.
This plan manages to avoid a massive sales tax hike, and millionaire’s tax hike, only to replace them with increases in corporate tax rates that will inflict slightly different, but still terrible damage on the state’s families and businesses.
New Jersey already has the worst business tax climate in the nation, according to Tax Foundation rankings. Yet, the legislature wants an $850 million-a-year corporate tax hike that will make this climate even worse.
Companies, earning more than $25 million annually, would be hit with a 4 percent surcharge – giving New Jersey the highest top corporate tax rate in the nation at 13 percent. Companies earning just $1 million annually would also be hit with a punitive 2.5 percent surcharge.
Attempting to justify these hikes with talk about federal tax relief giving New Jersey businesses a windfall is misguided. Federal reforms have companies investing in the state, providing bonuses and new jobs, all of which boost state revenue without need for a tax hike. The corporate rate hikes would punish this kind of investment. While they would be set to expire after two years, the smart money wouldn’t bet on that happening.
The budget package would also keep a host of Governor Murphy’s tax hikes. These include taxes on ride-sharing services like Uber, and home-sharing companies like Airbnb, which would only drive up costs for middle-class New Jerseyans who rely on them.
A new tax on vaping remains, S-2731/A-4219, changed from Governor Murphy’s reckless scheme. Yet, this tax would still add a significant burden to small businesses, and risk needed jobs.
Also included in the proposals is a new $23 million-plus money-grabbing fee on plastic bags, A-3267/S-2600, which hurts low-income residents who can least afford such a burden.
The Senate and Assembly plan increases spending on NJ Transit by $170 million, adds $345 million in additional school aid, and makes a $700 million increased pension contribution – where long-term reform is desperately needed. Economic development costs are another area worthy of review to save taxpayer dollars.
New Jersey taxpayers have had enough. Before it is too late, we urge you to stop having a debate over how to make New Jersey more unaffordable for families and business and start looking to contain spending. If you have any questions, please contact State Projects Director Doug Kellogg at [email protected]
President, Americans for Tax Reform