The circus that is the progressives’ protest of the statutorily scheduled sunset of a temporary corporate business surtax continued this week at the Statehouse, with seemingly no legislative support on their side.
But what would it say if a lawmaker did actually make the unlikely move to extend the 2.5% surtax, which is set to expire at the end of this year?
“This punitive act would be like declaring to every New Jersey citizen that you are at an extreme level of being anti-business, no ifs ands or buts about it,” said NJBIA Chief Government Affairs Officer Christopher Emigholz.
“If you’re proactively going out of your way to ensure businesses don’t get tax relief from a temporary and no longer remotely necessary tax that is supposed to expire, AND you have an $8 billion surplus, then you are unequivocally anti-business at your core – and every New Jersey employer and, or anyone who appreciates all the positives businesses bring to New Jersey, should be made aware of it.”
Currently, New Jersey’s 11.5% CBT rate is the highest in the nation – also the only double-digital rate in the nation.
Even with the scheduled 2.5% surtax reduction at the end of 2023, New Jersey’s 9% CBT rate would still be the fourth highest in the nation at a time when many states – most notably neighboring Pennsylvania – are lowering their corporate business taxes.
Progressive groups continue to counter that the sunset of the CBT surtax is a “tax break to wealthy corporations” who should “pay their fair share.”
“That just begs the question: If New Jersey businesses do not already pay their ‘fair share’ with the highest corporate tax rate in the nation and highest property taxes in the nation, then does anyone?” Emigholz said.
“The scary thing is their view is so narrow-minded and flawed, they can’t even acknowledge or understand the concept of competitiveness.
“Their premise is that a business is succeeding, so it can therefore afford a tax increase without harming other businesses or the economy. But that thinking ignores the fact that some businesses may not be enjoying the same level of success and a tax increase could make the state unaffordable for them.”
For the temporary CBT surtax to not sunset as scheduled, a lawmaker would need to put forward legislation to make it happen. He or she would also need to change the minds of Gov. Phil Murphy and Senate Budget Committee Chair Paul Sarlo, who continue to strongly support the CBT sunset.
In her updated budget testimony this past week, State Treasurer Elizabeth Maher Muoio also said the state can stay the course with the planned sunset of the CBT, even with revenue projections decreasing.
For his part, Emigholz continues to have many conversations with legislators to answer any questions about the surtax going away as scheduled.
“And they’re asking good questions,” Emigholz said. “At the end of the day, I think they realize we can do both – bringing at least some balance to our business taxes while also providing for our children, families and vulnerable residents. I think they realize the stimulative benefits for our economy with the decrease in the CBT. And I think they understand New Jersey needs to be competitive.
“We thank Governor Murphy and Senator Sarlo for their steadfastness on the CBT sunset, as well as the many other legislators who are supporting even further decreases in the CBT. And we’re just thankful for the sake of the sunset, and their own reputations that we haven’t heard of someone in the Legislature going out of their way to show their anti-business credentials by standing in the way of the right thing to do.”
