Many people are beginning to wrap their minds around the House Republicans’ proposed destination-based cash-flow tax and what it means for tax reform. Most people are still looking into the tax’s impacts on trade and how...
- NJ Biz quotes Scott Drenkard on New Jersey's busines...
NJ Biz quotes Scott Drenkard on New Jersey's business tax climate
October 09, 2012
By Katie Eder
Gov. Chris Christie's vow to improve New Jersey's rank in an annual state business tax climate report came through, but an economist with the nonpartisan Tax Foundation said the governor has New York to thank for the improvement.
Though Tax Foundation economist Scott Drenkard said "New Jersey and New York have been sparring for the bottom spot for years, with New Jersey often placing below New York," the state outranked New York in terms of business-friendly tax policies for 2013 — securing the 49th spot, as New York placed last.
While Drenkard said the Christie administration's move to block the so-called "millionaire's tax" kept New Jersey out of 50th place for what would have been the second straight year, he said the state only moved up because New York's increase of top earners' personal income tax caused it to fall — since individual income tax had more weight in the results than corporate tax.
Christie spokesman Michael Drewniak said the report shows New Jersey is "moving in the right direction, and it's all up from here," but he said, more importantly, New York's slip serves as a warning to any legislative efforts to increase taxes.
"The study illustrates the absolute folly of increasing taxes, which New Jersey Democrats have been hell-bent on doing since we arrived in Trenton," Drewniak said. "Look where that got New York. Now, imagine where we'd be if the Democrats would just pay attention, get on board and approve the tax relief we continue to fight for."
Even accounting for New York's personal income tax increase, Drenkard said New Jersey only scored a few thousandths of a point above New York in terms of overall business tax climate, as New York outranked New Jersey in the corporate tax, sales tax and property tax brackets.
Drenkard said both states' scores included the same penalty for offering tax incentives, since he said the credits "drive up tax rates for companies that don't qualify for them, distort the market and often fail to achieve economic growth." But even if New Jersey had eliminated investment, job and research and development tax credits for 2013, Drenkard said the state "wouldn't improve its score enough to overcome California," which placed 48th despite not having an incentive program in place for companies investing in new properties.
Click here to download the full report. Executive Summary Arkansas’s tax system is at a crossroads. After years without meaningful reform, the state seems poised to finally tackle the long-running issues within its tax code. The last...
Key Findings Amendment 69 in Colorado would reshape Colorado’s tax and health care system with a new 10 percent payroll and income tax and a new public option health care system. The 10 percent payroll tax is in addition to Colorado’...
Join the Tax Foundation's fight for sound tax policy Go
Tax Policy Blog
The official weblog of the Tax Foundation.
Related State Articles
- Lunch Links: OECD Raises U.S. Growth Projections Based on Trump's Economic Plans; Compromise Support for D.C. Payroll Tax for Paid Leave; N.J. Gov. Christie Reverses Stance on Tax Reciprocity Pact
- Lunch Links: Not So Sweet Soda Taxes Have Multi-City Appeal; Trump Includes Tax Reform in Efforts to Keep Carrier from Bolting; Christie Cites 'Blood Money' Tax Revenue in Shunning Marijuana Legalization for N.J.
- Lunch Links: IRS Regs Could Change in Trump Administration; New Jersey's Bond Rating Lowered Again; Illinois Shortfall Worse Than Expected; Politico Forum Upcoming on Tax Reform
- 1 of 67
- next ›
Tax By State
For information on your state, select it from the drop-down menu.
Ask a Tax Expert
Contact information for Tax Foundation policy staff Ask