A broad coalition of New Jersey business groups including the African American Chamber of Commerce and the Statewide Hispanic Chamber of Commerce wrote a letter to the New Jersey Congressional delegation voicing opposition to President Biden’s proposed tax increases.
The letter, signed by 96 groups, laid out the economic pitfalls of raising the corporate tax rate and taxation of Global Intangible Low-Tax Income (GILTI).
As noted in the letter:
New Jersey already has the highest state corporate tax in the nation, and the contemplated federal increase would be additionally destructive to New Jersey’s economy, subjecting our corporations to among the highest tax rates in the world.
Similarly, this increase in the corporate rate will make New Jersey businesses uncompetitive with the rest of the world:
New Jersey’s combined rate, with the discussed federal increase to 25%, would be 33.6%. The worldwide average corporate tax rate is estimated at about 24%, so New Jersey could surpass that by about 40%.
The coalition also voiced their concerns over the proposed increase in the taxation of GILTI:
A GILTI increase will push multi-national businesses to leave New Jersey and seek out states with lower GILTI rates, because we are already a GILTI outlier in how harshly we treat it at the state level.
A less competitive corporate tax rate would exacerbate substantial affordability issues faced by New Jersey residents, including:
Having the highest property taxes in the nation, some of the highest personal income tax rates and the general high cost of living and doing business.
If these tax increases go into effect, it would be detrimental to the investments that New Jersey businesses so badly need:
Spending on innovation and infrastructure would be curtailed, and needed advancements in broadband, R&D and manufacturing capital would be stymied.
The letter concludes with a plea to the administration to consider the consequences of their near-sighted actions:
New Jersey businesses are at a critical juncture as we attempt to survive and recover from the impacts of COVID-19, and we ask you to help move our economy in the right direction – the opposite of this disastrous tax increase proposal.
A link to the full letter can be found here.
[See also: Biden Tax Hikes Largest Since 1968]