We wanted to make sure our readers saw that New Jersey once again came in 50th out of 50 states in the Tax Foundation’s “2024 State Business Tax Climate Index,” which ranks the 50 states by how friendly their tax systems are to businesses. THIS IS THE 8TH YEAR IN A ROW NEW JERSEY HAS COME IN DEAD LAST.
Notably, New Jersey has been dead last for EVERY SINGLE YEAR THAT PHIL MURPHY HAS BEEN GOVERNOR. Clearly, having a vibrant private economy is not a priority of Murphy’s.
This is very worrisome for New Jersey’s future because a healthy state economy requires a tax system that allows businesses to flourish and attracts them to come to or remain in a state, providing jobs, income and tax revenues. These are all crucial to the long-term economic health of a state, especially one like New Jersey, with its severely underfunded pension liabilities and its enormous debt load.
New Jersey’s finishing dead last means that ALL the states that New Jersey competes against to attract businesses and entrepreneurs are more attractive than New Jersey – for eight years in a row. For example, in the 2024 index, neighboring Pennsylvania and Delaware came in 31st and 21st, respectively.
Here is New Jersey’s breakdown:
Corporate taxes: 48
Income Taxes: 48
Sales Taxes: 43
Property Taxes: 44
That’s bottom ten in the nation in all of these important categories.
What is Governor Murphy doing about it? Nothing: New Jersey’s tax climate actually got worse from 2021 to 2022 and was unchanged from 2022 to 2023. So since our governor was re-elected in 2021, New Jersey has been 50th and declining. No wonder taxpayers and businesses continue to flee New Jersey and our economy is a serial underperformer.
On the other hand, Governor Murphy is happy to use tax revenues to pay $7 billion (almost 14% of the state budget) into a broken and unreformed pension system in order to please his government union pals. But New Jersey businesses continue to get no relief from the widespread pain. (Murphy has promised to let his business tax surcharge expire but it remains to be seen if that happens).
During his tenure, Gov. Murphy has benefited from windfalls from federal COVID relief and record tax revenues from the post-pandemic rebound, but rather than improve New Jersey’s tax climate for businesses, Murphy has focused on taking care of the special interests that got him elected. Now Murphy has his eyes on his post-New Jersey political career, but the rest of us are stuck with a truly lousy business environment.