You already know that New Jersey has the highest property taxes in the nation, and the state doesn’t stack up well on income taxes either. NJ.com reports that the gross income tax is the biggest revenue source, which is projected to total about $14 billion in 2017. The top 1 percent of income tax filers—including small businesses who pay their business taxes at the individual rate as pass-through entities—pay roughly 35 percent of that.
Overall, New Jersey was ranked as the 7th highest tax burden in the U.S., according to data from fiscal year 2015 and Tax Foundation analysis. The rates are graduated:
- 1.4 percent (income up to $20,000)
- 1.75 percent ($20,000 to $35,000)
- 3.5 percent ($35,000 to $40,000)
- 5.525 percent ($40,000 to $75,000)
- 6.37 percent ($75,000-$500,000)
- 8.97 percent (over $500,000)
Rates are not currently adjusted for inflation, which would prevent tax bills from growing faster than real wages. And unfortunately, a study from small business lender Fundera found New Jersey’s tax status even worse: No. 1 Worst State for Small Business Taxes.