New Jersey State Senator Steven Oroho said published reports that New Jersey’s wealthiest resident moved to Florida for tax purposes at the end of last year is more proof that high tax rates do drive people from New Jersey. He also said that every time a high net worth individual moves, the state loses valuable resources to fund important programs, including many safety net services.
Sen. Oroho said it’s clear that high-income individuals are willing to flee New Jersey’s high tax burden, close their businesses and move to low or no tax states.
“My legislative colleagues, especially my fellow members on the Senate Budget and Appropriations Committee, have heard me repeatedly caution that it’s not hard for high income people with homes in Florida or other states to relocate permanently and reduce their New Jersey income tax liability to zero,” said Oroho. “Unfortunately, that exact scenario has once again been played out, and New Jersey will lose several hundred million dollars in tax payments just as a result of one such move.”
According to the report, David Tepper, with an estimated net worth of nearly $11 billion, relocated to Florida late last year. A January 1, 2016 reorganization moved his firm, Appaloosa Management, along with employees to Florida as well.
By establishing Florida residency, Tepper will be able to avoid New Jersey’s 8.97 percent tax on billions in deferred income he would owe taxes on in 2017. Florida levies no personal income tax.
“Every time there is talk about increasing taxes on the highest earners, we risk pushing more of them out of state, just as Mr. Tepper did, to states that don’t tax income at all,” said Oroho. “Think of all the critical programs, including those that act as a safety net, that could have been funded by the taxes this one person would have paid. Instead, he’s found a simple and effective way to lower his New Jersey tax bill to zero. Think of the devastating impact to New Jersey if just a handful of others at high income levels follow his lead.”
Oroho is sponsor of bipartisan legislation, S-1728, to phase out New Jersey’s estate tax, and S-998, to raise the retirement income exclusion fivefold for New Jersey retirees. He is also joining as a sponsor of legislation, S-1932, to establish a state income tax deduction for charitable contributions. Oroho said these bills are intended to help retain and attract capital resources back to New Jersey.
“According to the Tax Foundation, New Jersey has the third-highest tax burden in the nation, and much of that is borne by a few people at the highest income levels,” said Oroho. “These are people that we can’t afford to lose, but will lose if we stay on the same path.”
“New Jersey has both an estate tax and an inheritance tax that many other states don’t have, we have among the highest income tax rates, and we don’t give deductions for charitable giving that could benefit the non-profits that serve as a safety net to our residents,” concluded Oroho. “New Jersey has great assets, with so much to offer. Many people who have changed their residency to other states would truly love to continue to call New Jersey their home. Some may enjoy going to a warmer climate for the colder months, but just for a few months, and then return home to their families and friends. They are willing to pay a reasonable tax to enjoy all the benefits of New Jersey — not just at any and all costs. New Jersey has lost a total of $19 billion of adjusted gross income alone in just the last 10 years, and the exodus of this income is accelerating with the last year of available data being the worst yet. New Jersey can and must reverse this income exodus, if not, we risk losing more of our top taxpayers and having less resources to serve the people of New Jersey, which will put an even heavier burden on those who do not have the means to change their residency.”
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Friday, March 18, 2016
Sky High Taxes Taking Toll On This State
Posted by Dan Cirucci at 5:20 PM
Labels: Budget, business, jobs, New Jersey, State Spending, Taxes
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