And people wonder why NJ has a negative net migration?
The last time they raised the rates, they drove David Tepper out of the state and that cost $140M.
As I’ve noted in other threads, although people are not purely economic creatures, changes in marginal tax rates do have an impact on where people decide to call “home”.
More disturbing to me is the fact that they want to undo the tax deal they just made 2 years ago (cutting sales taxes in exchange for higher fuel taxes), confirming the fact that one can never trust the promises of government when it comes to taxation.
This governor is going to really leave an impact on NJ. Between taxes and letting out criminals who then immediately go on shooting sprees… glad I don’t live in NJ any more…
I don’t live there any more either, but we could not be more different on this subject. The wealthy don’t mind using the infrastructure in a given location, then they don’t want to pay their fair share when it comes to replacing / repairing that infrastructure, or paying for schools to educate their employees. I say if they want to leave because of taxes, don’t let the door hit you in the ass on the way out. States and cities don’t need these freeloaders, let them screw some other state out of their debt to society.
Does the legislature oppose the rise in sales tax ? The tax that disproportionally burdens the poor.
The 7% state tax increase is a regressive tax. This means lower incomes will pay more taxes because they usually spend it all to survive. The wealthy bank/invest/defer a good deal of their income, thus protecting it from taxation.
The top bracket in New Jersey has been 8.97% for a long time now - so there was no change that caused Mr. Tepper to move. Lots of people move to Florida - especially those that come from snow states.
Research on the migration of the very wealthy finds essentially no tax driven state-to-state migration. A key study is at https://web.stanford.edu/~cy10/public/Jun16ASRFeature.pdf that examined all million dollar income tax filers over a 13 year period.
This sounds like the businesses leaving California myth that won’t die.
It is the same type of thing. People of wealth are just as likely to move into a state because of the high levels of education and other attributes that high taxes are associated with as they are to move out because of taxation. It is pretty much a wash.
I know with the California thing, the state has one of the single largest economies in the world, yet you’d think it was collapsing due to a business exodus if you talked to some people, particularly folks on the Right. I can send them articles like the following and I might as well post it on a wall print-face in:
Fairly meaningless, but I found this ironic given our conversation:
Beck’s (and Limbaugh’s) acolytes on am radio regularly disparage California. Here’s the once-king of right wing conspiracism likely closing shop in Texas to move to . . . California?
There’s always the issue of defining “fair share”. The tax burden in NJ is already one of the highest in the nation (CA and NY still beat it) between income, property and sales taxes. The top 1% in NJ pay 40% of the income taxes already. Hardly “freeloading”.
As for businesses leaving CA, to @KC2669’s point, CA is fortunate that so many new businesses are being created in CA. I know it’s anecdotal, and we all know that anecdotes aren’t data, but I’ve seen a number of companies that I’ve done business with essentially freeze their CA operations and move new operations either to AZ, NV, TX, or offshore.
Read the article from San Jose Mercury I posted. Business creation in California is dynamic, and in line with all the other top states. You can’t be the largest state economy in the country and not have business development.
Note - in my post I said:
CA is fortunate in that so many new businesses are being create in CA"
CA is fortunate - it has lots of things going for it - great climate, dense population, lots of post-secondary schools, including some of the best of them. It also has a property market that is insane, and the highest taxes in the nation.
The result is that CA has net negative internal migration - http://lao.ca.gov/LAOEconTax/Article/Detail/265, with most of that migration going to lower tax states. Interestingly, the largest in-migration is coming from NY, IL and NJ - other high-tax states
The issue is never a simple one-issue decision. But, I repeatedly see technology companies (and no, not all of them - e.g., Apple’s new HQ) deciding to put their expansion outside CA, due to a combination of high costs, high taxes and high regulation.
Simply put, the more expensive you make it for a someone to do business, the more incentive you give them to move their business. Everyone has a different point at which they choose to react to those difficulties.
And yet, the actual numbers show California continues to expand its new business infrastructure in a manner equal to other large states, its growth rate is greater than the national average, and it outpaces most low tax states, including Texas. Its population growth has slowed, but it still sees an average of over 300,000 new residents a year. That is pretty damn solid and most states could only dream of that. Perhaps that’s why I see so many startups in my area, which is anecdotal too of course, but real.
Raise the fuel tax, then lower the sales tax. Then, raise the sales tax, again. Titter totter economic theory. Both hurt most N. Jersey residents.
Raise the income tax to ___ ( whatever works to restore older service cuts, etc. ) on the millionaires and the state will be fine.
Anyone who thinks former Gov. Christie knows anything about economics, or how to create a thriving and liveable state, needs to move to Florida with this Mr. Tepper. He can buy real estate 2 miles from the ocean and wait it out until he has an ocean view.
Can you tax multi-millionaires and billionaires too much? To the point of negatively impacting the overall guality of all the citizenry? No one knows, but it’s certainly past time to find out. Screw the old guard N. Jersey Dems; the hacks and lackeys in politics today are a dime a dozen. The citizens can always find more where they came from.
“The top 1% in NJ pay 40% of the income taxes already,”
I don’t have the figures, but how much of NJ’s GDP is listed as income for the 1% ? Do you have that number ?
If it’s like most states, it’s more than 40%, if this is true (that they make more than 40% of the GDP ), than they are freeloading.
Since you didn’t bring it up in you’re post. I assume you agree with me about the sales tax issue.
Typical right-wing innumerate con job excuse. If 1% are paying 40% of the taxable income that’s due to their income level. And because they have more tax sheltering facilities than most people their level of income is greater than 40% of the state’s income.
Why are NJ Democrats opposed to Democrat Phil Murphy’s proposed millionaire tax?
Because a large sector the the Party power structure is run by unelected plutocrat George Norcross. Norcross is an extremely thin skinned, narcissistic, millionaire who has given so much money to the Democrat Party, that he considers it a business acquisition. Go against Norcross and he will unleash his wrath upon you. https://www.phillymag.com/articles/2013/03/29/george-norcross-man-destroyed-democracy/3/
With the support of Norcross him, right wing Democrat Steve Sweeney has become President of the State Senate. Steve Sweeney’s model of governance is reminiscent of Tony Soprano.
I couldn’t find the share of income of the top 1% for NJ but the top 5% earn 29% of the income. So, I’d say that the top 1% paying 40% of the taxes on call it probably less than 20% of the income is well into fair share territory
Exactly. And it’s proposed by a “liberal” Dem.
Thank You for this. Somehow Boteach managed to leave out the fact that the Dims are a wholly-owned subsidiary of U.S. plutocrats and corporatists - i.e. capitalists.