Millionaire’s Tax

Date: November 07, 2014

NFIB Continues Fight Against Increased Taxes

NFIB successfully fought off multiple efforts pass the “Millionaires Tax”.  The legislation proposed a “temporary” income tax rate increase on New Jersey residents earning over $1 million a year to raise an estimated $600 million for the state.   NFIB/NJ strongly opposed the measure which would have increased New Jersey’s top income tax rate to 10.75% from the current 8.97%.

An estimated 35% of new tax revenues from the increase would have been paid by New Jersey businesses. Many small businesses formed as LLCs, partnerships and S corporations don’t pay corporate taxes, but pay their business taxes through the personal income tax. These employers are already struggling with rapidly increasing health care costs and are planning for another round of payroll tax increases this year due to the automatic triggers in the Unemployment Insurance (UI) funding formula. New Jersey is already at a competitive disadvantage with Pennsylvania, where the income tax rate is a flat 3.07%. Increasing New Jersey’s top rate even more would have driven more businesses out of the State, costing us jobs and tax revenues.

Furthermore, these are the types of one-shot tax increases that have contributed to the State’s fiscal mess. This temporary tax would have created a budget deficit to be closed next year. The only way to get New Jersey’s finances in order is to reduce spending so it matches recurring revenues.
NFIB strongly opposed this proposal and testified that this rate increase would discourage business owners from creating and retaining jobs or expanding their investments in New Jersey.   New Jersey already has the highest top rate in the country and increasing this rate would worsen this competitive advantage.   Governor Chris Christie vetoed this proposal twice.  
 

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