The future of the contentious $3.5 trillion reconciliation bill be uncertain. But what is certain is New Jersey manufacturers will be assessed the largest corporate business tax (CBT) in the industrialized world if it passes.
On Friday, National Manufacturing Day, NJBIA and NJMEP issued a joint statement urging the state’s congressional leadership to fight for New Jersey’s businesses when it comes to CBT.
“We need our leadership to fight on behalf of New Jersey’s businesses and not allow our state to go from a national outlier to a global outlier when it comes to business taxes,” said NJMEP CEO John W. Kennedy and NJBIA President and CEO Michele Siekerka.
The latest in the ever-changing reconciliation bill would raise the federal corporate income tax rate from 21% to 26.5% for all corporations.
New Jersey already has the highest corporate business tax in the nation. But because the United States has layers of state and federal corporate business tax rates – this federal increase would give New Jersey manufacturers and corporations a whopping combined business tax rate of 34.95% – which would be the highest in the industrialized world.
By comparison, the next highest combined rate is Portugal at 31.5%. The vast majority of industrialized nations have rates below 30%.
Siekerka and Kennedy said that manufacturers will be particularly vulnerable to this massive increase because most are small- and mid-size firms, which are often registered as corporations.
“Most manufacturers in New Jersey, and in the nation, are not, in fact, major corporations,” they said. “So make no mistake, this enormous rise in corporate business taxes will greatly impact the ability of manufacturers to create and retain jobs.
“Further, it will reduce the capital manufacturers use to invest in their companies. And it will further drive up consumer prices.”
To read the full statement, click here.