Businesses registered as C-corporations and earning more than $1 million would see their corporate business tax rate rise to 12 percent under a plan proposed today by Senate President Steve Sweeney (D-3). NJBIA is concerned about its impact on New Jersey’s competitiveness, especially with neighboring Pennsylvania, our number one outmigration state.
Sweeney said his plan was designed to raise revenue from corporations that benefited from the federal tax reform plan that took effect this year.
“The Republican plan provided a huge tax cut for corporations, slashing the federal corporate tax rate from 35 percent to 21 percent, while sharply limiting the federal income tax deduction for state and local taxes on which millions of New Jerseyans depended,” Sweeney said. “My bill would recapture a portion of that corporate windfall to fund programs that will make New Jersey a better place to live and work.”
In response, NJBIA President and CEO Michele Siekerka and NJ Chamber of Commerce President and CEO Tom Bracken issued a joint statement:
“While we are still studying the details of the proposal, both NJBIA and the Chamber are concerned about the impact this tax surcharge would have on New Jersey businesses. This 3 percent surcharge on corporate business taxes is in fact a tax increase that would make New Jersey the highest rate in the region, raising it to 12 percent of revenue. This would make us significantly less competitive with our border state of Pennsylvania, which is our number one outmigration state.
“A proposal of this magnitude must be fully vetted, so we thoroughly assess the consequences, intended and unintended. For instance, in vetting the new federal tax law, we see that it broadens the base of income on which C-corps are going to be taxed. It is estimated that New Jersey’s tax revenue will increase up to nearly 12 percent because of this. Therefore, this proposed 3 percent tax increase would be on top of the federal tax burden these companies are now paying and could increase the taxes paid by affected companies by up to 50 percent.
“In other words, it would make an already challenging tax climate even more uncompetitive and our state less affordable. The bottom line is New Jersey is already a high-tax state. Raising taxes should not be the starting point for putting together a new budget.
“This tax increase would come at a time of uncertainty for New Jersey businesses, when proposals such as mandatory paid sick leave, a $15-an-hour minimum wage, and other policies are being discussed in real time.
“Further, we need to acknowledge that since the federal tax reform initiative became law, New Jersey corporations have been reinvesting their savings in the state, providing wage increases and salary bonuses to their workers, and rebates and price cuts for their consumers. No doubt this tax increase will impact that.
“Both organizations stood in support of the Economic and Fiscal Policy Working Group initiated by the Senate President to take a comprehensive look at New Jersey’s economy and tax structure. It is only appropriate for a proposal such as this to be part of the comprehensive discussion about overall tax reform and how to make New Jersey more affordable and competitive. That was the expressed purpose of the task force.”
This moron does not have a clue Never Owned a business doesn’t know how to run a business. Between Sweeny And this new governor it really is time to get out of New Jersey
This moron does not have a clue Never Owned a business doesn’t know how to run a business. Between Sweeny And this new governor it really is time to get out of New Jersey.
i am in total agreement with Richard we get a great tax cut from President Trump only to give it away to the devouring New Jersey tax raising MONSTERS , Murphy and his band of thiefs time to pay the last tax, the exit tax.
What a surprise. Socialists being Socialists.
Sweeney never met a tax he didn’t like. Planning my exit strategy as we speak. How about reducing spending? How about fixing the state pension by eliminating it for new hires and going to a 401K contributory program? How about eliminating the Abbott School districting that doubles the cost of every homeowners Education portion of their real estate taxes. 31 Abbott School districts get more State Aid than the other 647 districts combined. The program has been a total failure for 20 years. If NJ taxpayers knew that the education portion of their real estate taxes (currently over 60% of total) would be cut by more than 50% by eliminating Abbott districts we would have riots.
Good luck in getting the Amazon Q2 with this “improved” tax climate!
The State of New Jersey never misses an opportunity to implement a new tax when and whenever it can. For once, small business gets a tax break after carrying the burden, for what seems like forever, and our new Socialist Govamanure is drooling at the thought that such a sweet opportunity to delve into our pockets, once again, was provided by the Republicans, who’s main objective was to cut taxes and improve the quality of life for individuals and kick start the economy. Our Socialist Govamanure could care less if people and businesses leave New Jersey in droves, he is so myoptic that his only concern is who can he tax today, who many new cronies can he hire in State Govamanurement today and how can we assure our overpaid and underworked State employees that their fat pensions are safe today. Crookednomics at it’s finest.
New Jersey real estate, business and residents are held captive with incompetent liberal politicians. The results are; real estate, business and residents which have lost value and hope and soon only the lost will be left in New Jersey. NO ONE can afford to pay the taxes these idiots are demanding!
Is Mr. Sweeny out of his mind? NJ is ranked 49th out of 50 states for business. Just behind CA. Businesses, and consequently employment, has moved out of this state at a very rapid rate. Now, Mr. Sweeny proposed to make NJ even more business hostile? If everyone leaves who will pay the taxes that pay his salary? Will the last one to leave please turn out the lights!