Copyright Joliet, IL Patch
Some want the state to raise taxes on wealthy corporations. Others want New Jersey to lower the rate and make the state more "competitive." To tax or not to tax – that’s the question in New Jersey, as the state’s governor race enters its home stretch. A perpetual hot-button issue in the Garden State, property and sales taxes are expected to play a huge role in the 2025 gubernatorial election, with the majority of residents strongly opposing increases to either category, according to recent polls. Experts remain divided on a key financial question, however: Should New Jersey raise or lower taxes for businesses? The state has a corporate tax rate of 9 percent for businesses with a net income higher than $100,000 per year. Business that that earn more than $10 million per year are subject to an extra 2.5 percent surcharge. The surcharge, which expires in 2029, is intended to help NJ Transit balance its budget. Here are two different takes on the issue: RAISE CORPORATE TAXES Last week, a coalition of more than 40 unions, community organizations and advocacy groups sent a letter to Gov. Phil Murphy and the New Jersey Legislature. Their demand? Raise taxes for the state’s wealthiest corporations and households. Advocates with the For The Many coalition said they’re calling for higher taxes on businesses to pay for health care, housing, education and transit. The coalition urged state lawmakers to pass two key reforms during the lame duck session, while Murphy is still governor: “Require large multinational corporations to report profits from overseas subsidiaries and end offshore profit-shifting that drains over $1 billion from the state budget.” “Create new tax brackets for those earning over $2 million, $5 million and $10 million annually.” “New Jersey families are already struggling with skyrocketing housing costs, unreliable transit, and rising prices for groceries and utilities,” said Eric Benson, coalition manager at For the Many. “The wealthy and well-connected got the biggest handouts from Washington,” Benson said. “Now it's time for them to pay their fair share so we can protect the health care, housing, and services our communities need.” Advocates said their letter comes as Congress “passes massive tax breaks for millionaires, billionaires and corporations” – while also “cutting health care, food assistance and other critical services” that New Jersey families depend on. Read More: NJ SNAP Benefits Won't Go Out In November, Officials Confirm “Families are struggling with skyrocketing costs and a tsunami of federal cuts to essential programs,” said Maura Collinsgru, director of policy and advocacy for New Jersey Citizen Action, a member of the coalition. “Every delay means higher costs for families, deeper holes in the state budget, and more families being pushed to the brink,” Collinsgru said. See Related: Racial Wealth Gap Is Ballooning In New Jersey, Study Finds See Related: 'Overpaid CEO' List Includes Companies With Big Footprints In NJ LOWER CORPORATE TAXES The New Jersey Business and Industry Association (NJBIA) has taken a different stance on corporate taxes in the Garden State, which are some of the highest in the nation. Earlier this month, the NJBIA released a video series highlighting its “Blueprint for a Competitive New Jersey,” a 28-page policy document geared towards the 2025 governor election. One of the videos – “Taxation and Economic Development” – includes a segment about business taxes in New Jersey. “The glaring, glaring issue that you have to talk about when we’re talking about our tax problems is the highest in the nation corporate tax rate of 11.5 percent,” NJBIA chief government affairs officer Christopher Emigholz said, calling it the “most economically harmful tax of all the taxes.” Emigholz pointed to Pennsylvania, which has introduced a bipartisan plan to phase down its corporate tax rate from 9.9 percent to 4.9 percent. “There’s no reason why we can’t do the same in New Jersey to make ourselves more competitive,” he said. In their blueprint, the NJBIA calls for growing the Garden State through “competitive tax policies” and targeted business investment. “It is no surprise to anyone that New Jersey has high taxes, but it may be surprising to some how much of an outlier our tax climate is,” the group writes. “We are the only state with a rate in the top third of the nation in each of the four major state and local taxes: highest corporate taxes, highest property taxes, a top income tax rate that is among the highest in the U.S., and a sales tax higher than two-thirds of the states. These outlier tax rates make New Jersey less affordable and competitive.” “Of course, that harsh outlier tax environment impedes business growth,” the NJBIA adds. “But New Jersey also needs to get out of its own way to comprehensively support opportunities for all businesses, including small and diverse businesses and any business looking to build here.” Read More: $500M In Tax Breaks Approved For New Jersey’s Manufacturing Industry Read More: 5 Crucial Issues In NJ Governor Race: Here's Where Sherrill, Ciattarelli Stand Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site.
