New Jersey dead last in tax analysis for sixth straight year
(The Center Square) – For the sixth straight year, New Jersey finished dead last in the Tax Foundation’s State Business Tax Climate Index.
The public policy nonprofit group uses the index to review how each state structures its various tax systems. That includes levies on businesses and individuals as well as taxes on property and sales. Typically, states that do not have income or sales taxes or feature low rates and simple structures across the board fare better in the report.
The report gave a scathing analysis of New Jersey’s tax policies.
“New Jersey, for example, is hampered by some of the highest property tax burdens in the country, has the highest-rate corporate income taxes in the country, and has one of the highest-rated individual income taxes,” the study stated. “Additionally, the state has a particularly aggressive treatment of international income, levies an inheritance tax, and maintains some of the nation’s worst-structured individual income taxes.”
New Jersey did not finish last in any category, but its best ranking was 32nd for unemployment insurance taxes. Both corporate and personal income tax policies were ranked 48th. The Garden State was ranked 42nd for sales taxes and 45th for property taxes.
The report found the state’s 11.5% corporate tax rate is the highest of any state that levies such a tax. It’s also one of the more complex as it features four brackets. Further, like the other 14 states with bracketed corporate rates, New Jersey does not index its rates to account for inflation.
For personal income taxes, New Jersey’s 10.75% rate was surpassed only by California’s 13.3%, Hawaii’s 11% and New York’s 10.9%.
The report found New Jersey had an individual income tax base that creates “an unnecessary drag on economic activity,” along with California, Connecticut, Delaware, New York and Ohio.
For sales taxes, the report called out New Jersey as one of eight states with policies that “hamper economic growth,” such as excluding more goods and services than they should and imposing “excessive” excise taxes.
Regarding property taxes, the report used Census Bureau data to determine per capita amounts paid, and New Jersey’s rate of $3,513 was the highest of any state.
Delaware earned the best ranking of New Jersey’s neighboring states at 16th. Pennsylvania finished 33rd, while New York finished just ahead of its neighbor for the fifth straight year.
Wyoming was the top-ranked state, which it has been since 2014, according to the report.
