Senator Steven Oroho, a member of the Senate Budget and Appropriations Committee, reiterated the need for the enactment of significant tax reform to help stimulate the New Jersey economy and ensure the future ability of the State to meet its obligations.
“New Jersey is trending in a dangerous direction, with the outmigration of residents, income and wealth accelerating in recent years to lower-tax states,” said Oroho. “We all share the goal of strengthening the New Jersey economy, but we must push forward with tax reform efforts if we hope to retain and attract capital which will strengthen our ability to meet our financial needs.”
Oroho noted that certain naysayers always claim the sky will fall if tax cuts are enacted, pointing to opposition to business tax cuts in recent years.
Naysayers always claim sky will fall if tax cuts are enacted, but they're wrong. We must move ahead w/ tax reform. https://t.co/AOUFrfFTLD
— Senator Steven Oroho (@stevenoroho) May 20, 2016
The bipartisan business tax reforms that started with the FY 2012 budget include: long-awaited changes to a single sales factor formula that incentivizes businesses to invest in New Jersey; income/loss netting and loss carry-forward reform; a 25% reduction in the minimum tax on S corporations, which is how many small businesses file their taxes; research and development incentives; and the elimination of the Transitional Energy Facility Assessment.
These changes equated to over $3 billion in savings to businesses which helped to create jobs and started growing the economy again.
Despite the concerns of critics, with the tax cuts now fully phased-in, revenues collected through New Jersey’s Corporate Business Tax (CBT) are projected to increase to $2.47 billion for FY 2017, up from $2 billion in FY 2010 prior to advent of the cuts.
“After enacting corporate business tax reforms, our business tax receipts actually increased and our unemployment rate dropped by half,” said Oroho. “While we’ve proven that cutting taxes can help grow the economy, we still have much more to do to make New Jersey truly competitive with other states. The good news is that the additional tax reforms we are proposing will lead to increased growth and expand the State’s ability to serve our residents and fund budget priorities.”
Oroho is the sponsor of bipartisan legislation, S-1728, to phase out New Jersey’s estate tax, and S-998, to raise the retirement income exclusion five-fold for New Jersey retirees. He is also a sponsor of legislation, S-1932, to establish a state income tax deduction for charitable contributions.