A number of factors play in this decision, but what New Jersey must do – not specifically aimed at this case but as a general policy – is what I have proposed in my program: You operate in New Jersey and you pay no income tax, no property tax, and your shareholders pay no tax on the company’s dividend.
We are competing with giants such as India, Canada, and Europe when it come to the pharma industry. Even China has attracted a great deal of investment in the sector, notably in the intermediates industry.
Intermediates, in chemical terminology, are precursors of a drug or ingredients to make a drug.
The Christie administration still can offer a tax credit if the layoffs are suspended but that is overall a very inadequate policy to preserve or attract investment. But I do not intend to criticize the governor for this: There are events when the only recourse the government has is to try to be proactive.
If we want companies here, we must outperform others and that is not going to be in salaries or environmental regulations so it has to be in the areas I mentioned above.
Obviously the government must take other steps to be able to afford a no-corporate-tax policy. Corporate taxes account for about 9% of the total state budget. Among those steps the government must take, it is reducing its own size.