State to be denied economic boon seen nationwide as federal tax cuts create business surge
TRENTON (July 1, 2018) – NFIB, the leading small-business association in the nation with thousands of members in New Jersey, said today the budget deal reached by the Legislature and Gov. Phil Murphy would hurt small businesses in the state, their employees, and the state economy.
“Most people don’t realize that the income tax increase on high earners negatively impacts small-business owners who are not multi-millionaires,” said NFIB’s New Jersey State Director Laurie Ehlbeck. “Since most small businesses are pass-through companies, they file their business income on their Personal Income Tax form, and many will be hit hard by this new, higher tax. Most small company owners don’t pocket that income, but reinvest it in their businesses.”
“Small businesses are the backbone of every community, and they create more than half the new jobs, but this budget plan could drive them to other states or have the business owner throwing their hands in the air and closing up shop,” added Ehlbeck. “Even if they stay here and stay open, they will have to pay for the higher taxes by trimming their workforce, if consumers won’t pay a higher price for their goods.
“The new higher New Jersey corporate tax rate also has a very negative impact on the state. It will reverse the positive economic trends we see from recent federal tax cuts. Right now, the economy is surging nationally, and states are seeing increased revenue. NFIB’s Small Business Economic Trends surveys show record earnings, more hiring, company expansions and higher sales across the country. Now, New Jersey’s state’s economy will not surge but suffer.
“Our governor and our legislators may just as well have hung up a sign in the Capitol saying “New Jersey is Closed to Business,” And, if those companies leave, their taxpaying workers move where the jobs go. Our state already has the highest out-migration rate in the region of taxpayers leaving New Jersey, and this makes much worse.”