Taxes, the Economy, and Outmigration - Sunlight Policy Center

Taxes, the Economy, and Outmigration

The NJEA’s political dominance has had negative effects on the state’s economy.  At the local level, the NJEA has used its virtual political monopoly and collective bargaining powers to drive ever-higher education spending, resulting in New Jersey’s highest-in-the-nation property taxes.  When property taxpayers revolted, the NJEA then successfully pushed for state-level sales and income taxes, and has been behind every state tax increase since.  The result is that New Jersey has the worst tax system for businesses in the nation.  Consequently, New Jersey’s economy has underperformed both the nation and its neighboring states with whom it competes for businesses and jobs.  Ominously, New Jersey’s high cost of living and underperforming economy have led to one of the largest out-migrations of citizens and wealth in America, putting additional pressure on state budgets.  This downward economic spiral threatens the future of the state.

Taxes, the Economy, and Outmigration

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Who has been complaining about the sales tax anyway?

NJEA: Higher taxes, who has been complaining about the sales tax anyway?

Increasing the gas tax makes sense. But it’s irresponsible to negotiate a deal that raises this tax while reducing other state revenues … And who has been complaining about the sales tax, anyway?”

— NJEA Executive Director Ed Richardson, 2016.

Apparently not Richardson. After all, he is a multi-millionaire, himself, having been paid $2.98 million of taxpayer dollars from 2013-2016. Maybe Mr. Richardson has forgotten that gas and sales taxes are the least progressive taxes. They are the same for everyone and thus hit middle-class New Jerseyans much harder than they hit a one-percenter like Richardson. Perhaps that is why he totally disregards their impact on middle-class New Jerseyans – including teachers, who make $76,000 a year. Where is the tax “fairness” in that?

There’s a reason why the NJEA has constantly pushed for higher taxes.

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Issue 7: taxes, the economy, and outmigration

Beware The Downward Spiral: The Economic Consequences Of New Jersey’s Special-Interest-Dominated Status Quo

“If I were relocating to some state that had a huge unfunded [public sector] pension plan I’m walking into liabilities. I say to myself, ‘Why do I want to build a plant there that has to sit there for 30 or 40 years?’ Because I’ll be here for the life of the pension plan, and they will come after corporations, they’ll come after individuals … they’re going to have to raise a lot of money.”

– Warren Buffet, 2019. 1

If Warren Buffet is asking this question, then American businesses are asking this question.

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In Murphy’s road-to-the-White-House narrative, New Jersey is growing, but back in the real world, New Jersey has one of the worst outmigrations of people and wealth in the nation.  This has been a long-term problem, and several 2022 surveys show that New Jersey continues to lose people and wealth to other states.  Over the past two years, its population has actually shrunk.

Likewise, Murphy claims New Jersey is a great place to locate a business, but for every year he has been in office, the state’s business climate has ranked dead last in the nation.

This all bodes ill for the state’s economic and fiscal future, but rather than address New Jersey’s most difficult problems and make the state more hospitable to people and businesses, Murphy is content to maintain the status quo and keep his government union supporters happy.  It sure looks like Murphy sees New Jersey as a stepping-stone for his political ambitions, nothing more.

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