Two Years Into Christie’s Reign, New Jersey Still Worst State in Business Tax Climate Index

The Tax Foundation – 2012 State Business Tax Climate Index.

That comes as no surprise since the governor has his attention divided between New Jersey and flirting with a run for national office. Furthermore, that divided focus forces Christie to maintain a rigid ideological posture. He now has the gay marriage referendum to keep everyone distracted from the administration’s failures.

The Legislature, controlled by the democrats, does not fare any better. The current leadership of the Senate has set regional interests as priorities over state-wide concerns. Both branches of government are above all determined to maintain control: Their business is to remain themselves in business.

New Jersey could move from the 50th spot to # 1 in one single year if we eliminate all corporate taxes – as I propose. S corporations would no longer have to transfer earnings to personal N.J. income tax returns because their tax would be ZERO. The difference between spots 50 and 1 in the Tax Climate Index could translate into 100’s of thousands of new jobs in the state even while increasing the minimum wage with a real and economically effective increase of almost 150%.

Corporate taxes represent less than 10% of the state budget – about $2.8 billion. We can add another billion for small busnisses, professional employers, etc. Let’s round it off to a $4 billion price tag: That amount is less than what New Jersey would save just by eliminating the County governments – even when keeping county schools and some departments such as DPW’s and Counties’ Divisions of Taxation. 

Now I ask this: What would help New Jersey more?  ZERO corporate tax rate and increasing aggregate demand with the higher minimum wage OR maintaining the Medieval institution of county government?