“Don’t blame the executives… They are just responding rationally…choppering home every night [to Pennsylvania] means they can pay a flat tax of 3 percent to Pennsylvania, rather than roughly 9 percent to New Jersey.” (Tom Moran, The Star-Ledger, 11/20/11)
“You are kidding yourself if you think you can be one of the highest-taxed states in the nation, have a reputation for being anti-business — and have a rosy economic future.” Gov. Andrew Cuomo, DEMOCRAT- NY, 10/17/11)
Responding to a Sunday, November 20, 2011 editorial by Star-Ledger columnist Tom Moran, state Senator Steve Oroho (R- Sussex) said today that New Jersey’s reciprocal income tax agreement with the Commonwealth of Pennsylvania demonstrates that high state taxes encourage taxpayers and revenue to leave or stay away from New Jersey.
“Lost in the class warfare rhetoric and political posturing about increasing the income tax is the real life example of businesses, people, jobs and tax revenue leaving New Jersey for Pennsylvania because they’re taxed less on the other side of the Delaware River,” said Oroho, a certified financial planner. “The Star-Ledger’s illustration of this phenomenon proves the point I’ve been making all along about the Majority’s attempts to raise the income tax: people will move, along with their capital investment, to a lower tax jurisdiction if they have the means and ability to do so. We know New Jersey will never be a low cost state, but it is imperative for us to be competitive in order to retain and attract the capital investment that creates jobs.”
Oroho urged his colleagues to abandon rumored plans to resubmit legislation to hike the state’s top income bracket in the 2011 lame duck session. One such proposal raises New Jersey’s top rate to 10.97 percent, nearly 8 points more than Pennsylvania and 4 points greater than New York.
“This isn’t about defending people of means, it is a recognition that we are chasing people and tax revenue out of our state, and dissuading countless others from coming in,” he continued. “Our rates and tax code simply are not competitive with our neighbors. The last time New Jersey raised the top tax rate, we chased $70 billion in wealth from our state. Now is not the time to double down on policies that shrink our tax base and cost New Jersey jobs and investment. Capital investment will follow the best path available to success. New Jersey has great assets, a great location, workforce and foundational infrastructure, but as every successful manufacturer and retailer knows – if your prices are not competitive new customers stop coming in the door, you lose your existing customer base, and you lose revenue. With a competitive tax and regulatory structure capital investment and businesses will flow into New Jersey to take advantage of our great assets, and jobs and revenue will increase.”