Appearing on News 12’s NJ Power & Politics (at the 5:09 mark), NJBIA President & CEO Michele Siekerka said the governor’s plan to allow the corporation business tax surcharge to expire as scheduled was the right thing to do and naysayers’ complaints on the budgetary impact are exaggerated.
“It should sunset because it is certainly the right thing to do for a number of reasons,” Siekerka told News 12’s Alex Zdan in the program’s March 17 episode. “We need predictability and reliability for the business community. When we say we’re going to do something, we have to keep that promise because that’s what affords businesses the opportunity to plan and invest.
“No. 2. It’s unfair to say this is going to blow a hole in the budget,” Siekerka said addressing the criticism from progressive groups who don’t want the temporary 2.5% surcharge on the state’s 9% CBT rate to expire, which would keep New Jersey’s 11.5% CBT rate as the nation’s highest.
“What they’re not considering is what is going to come into the economy and into the budget as a result (of allowing the surtax to expire),” Siekerka said. “What we’ll see is stimulated economic activity, reinvestment in our companies, job growth.”
Siekerka said other states that have cut corporate income tax rates are seeing increased economic activity and job creation.
“Pulling down their CBT rates, those states are having higher GDP as a result,” she said.
Corporate taxes also impact a state’s competitiveness, she said, noting that New Jersey’s neighbor, Pennsylvania, is already phasing down its corporate tax rate by a half-percentage point annually until the rate reaches 4.99% in 2031.
“Large corporations create thousands upon thousands upon thousands of jobs here in the state of New Jersey,” Siekerka said. “Let’s not be inviting them to take their business elsewhere. Regional competitiveness is important.”