The following editorial by Senator Steven Oroho (R-Sussex, Warren, Morris) on efforts to eliminate New Jersey’s estate tax was published in the Star-Ledger on January 24, 2016:

Sen. Steven Oroho says it time to focus on reforming New Jersey’s estate tax, one of this state’s two nation-high death taxes, in this Star-Ledger editorial. (SenateNJ.com)

The push to eliminate New Jersey’s estate tax is multipurpose:

• It keeps grandparents together with their families to enrich our society and future generations.
• It protects and increases funding for critical public services, such as healthcare, education and transportation infrastructure.
• It make sure there are diverse opportunities and ample well-paying jobs for people in the workforce to provide for their families.
• It enhances charitable giving to our nonprofits that provide critical safety net support.
• The good news: This year there appears to be enough bipartisan backing to finally get it done.

Legislative leaders of both political parties as well as Gov. Chris Christie agree that it’s time to focus on reforming New Jersey’s estate tax, one of this state’s two nation-high death taxes.

Eliminating the N.J. estate tax will create more jobs, protect services | Opinion https://t.co/P1HCaYETZw pic.twitter.com/MNespwoxt8

— NJ_Opinion (@NJ_Opinion) January 24, 2016

Several solutions have been proposed from phasing out the estate tax, to increasing its threshold, to instantly ending it. Many of these legislative proposals enjoy bipartisan sponsorship. I am particularly pleased that Senate Budget and Appropriations Chairman, Paul Sarlo (D-Bergen), is on a bill with me to phase out the estate tax entirely.

As a legislature, we can’t waste or delay this opportunity. We must act to reform the estate tax to stop the flood of residents and revenue that have been leaving this state.

This bipartisan push is not aimed at the wealthy, but rather an acknowledgement that we can no longer afford to see too many retirees and employers leave New Jersey in order to protect assets they deserve to pass on to future generations without undue financial penalty.

Studies continually show New Jersey leading the nation in the outmigration of residents.

One such report recently released by the New Jersey Business & Industry Association indicated that two-thirds of business owners surveyed said they do not plan to keep New Jersey as their domicile in retirement and a similar percentage said they take estate taxes into account when making business decisions.

According to the latest available IRS data, New Jersey has lost a net outflow of approximately $19 billion in adjusted gross income to other states over the last ten year period. There has not been a single year in that time when New Jersey has gained taxable income, and the net losses are increasing.

In other words, as this trend continues, our state is losing billions of dollars in tax revenues.

Billions of lost tax dollars that could pay for critical public services, such as education, health care programs and infrastructure projects. However, it is not just tax resources that are impacted, but our charitable organizations have lost hundreds of millions in financial contributions each year because benefactors want to prove New Jersey is not their principal domicile, so they give to charities in other states.

The only way to turn this troubling tide is to make New Jersey’s nation-high tax structure more competitive with less costly states that are luring away our residents and employers.

New Jerseyans with estates worth over $675,000 pay a $19,000 state tax, which increases with every dollar beyond the $675,000 threshold. An individual’s estate is all of one’s assets combined – home, furnishings, property, cars, retirement savings, any asset — for many New Jerseyans it is not difficult to attain $675,000 in assets as one nears retirement. And that high cost is no comparison to the federal estate tax that is levied on estates worth more than $5.43 million or the 36 U.S. states that do not have any estate tax.

Based on numerous discussions with my colleagues in the accounting and financial planning professions, I can say that New Jersey’s uniquely high death taxes are disproportionately to blame for the outmigration and resulting tax revenue losses, and they do not just impact the wealthy.

It’s very simple. Many New Jerseyans are moving to lower cost states, especially in retirement, and states with no estate tax are especially attractive. This outward migration is backed up from multiple sources, as well as our personal knowledge of former neighbors and co-workers who already left.

As we continually lose tax revenue from the countless families who decide to move or retire to more affordable states, it puts more stress on the state’s revenue stream which impacts all of us. So it’s a fallacy that estate tax reform would only impact the very wealthy.

This year, we can stop the bleeding by eliminating the estate tax, making the state more competitive and attractive to businesses, helping to create jobs, and more importantly, keeping New Jersey families together enriching our communities.