the staff of the Ridgewood blog
Trenton NJ, Assembly Republicans on the budget committee unanimously rejected a competing legislative tax plan today that raises taxes by $1.2 billion dollars. Legislative Democrats swapped Gov. Phil Murphy’s proposed millionaires tax and sales tax increase for a corporate tax hike and other tax increases.
“Legislative Democrats keep warning about how Murphy’s millionaires tax will drive high-earners and their businesses out but their plan taxes businesses at a much higher rate,” said Assemblyman John DiMaio (R-Warren), the Republican budget officer.
Under their plan, the top rate on corporations would jump from 9 percent to 13 percent. Murphy proposed raising the top income tax rate from 8.97 percent to 10.75 percent on income over $1 million.
“That is much more likely to make businesses move out, not the other way around,” concluded DiMaio. “Their own argument refutes their plan.”
The new rate would apply on corporations earning more than $25 million and would become the highest business tax in the nation. Businesses earning between $1 million and $25 million would also pay a slightly lower rate of 11.5 percent. That would only be exceeded by Iowa at 12 percent, which is in the process of lowering its top rate to 9.8 percent.
New Jersey currently has the sixth-highest corporate tax rate in the country, and has been rated the worst business tax climate for the past four years according to the Tax Foundation.
“Increasing corporate business taxes for even two years to what is already one of the highest rates in the nation will slow already lagging job growth,” added Nancy Munoz (R-Union), a member of the budget committee.
New Jersey has lost nearly 15,000 jobs since January, according to the Bureau of Labor Statistics, while the labor force has decreased by 30,000 people.
“Democrats claim they want to help those who are struggling but they make it harder by increasing the cost of doing business,” continued Munoz. “When jobs are being lost, the poor get poorer and the middle-class shrinks.”