Newspaper article The Record (Bergen County, NJ)

Reforming the State's Tax Structure

Newspaper article The Record (Bergen County, NJ)

Reforming the State's Tax Structure

Article excerpt

THE New Jersey Society of Certified Public Accountants -- the folks that do many of our taxes -- released its third annual survey of members, and the results - particularly for the state's economic climate - are not pretty. One indication of the snail's pace economic recovery is that 45 percent of the CPAs felt that the state's economy was about the same as last year, and 56 percent believe it will be about the same in 2015.

One reason for this perception of a stagnating economy in the state is that a vast majority (71 percent) of the state's CPAs believe that the business climate hinders economic growth.

How can policymakers fix this economy? A clear consensus emerged regarding New Jersey's tax structure: fully 87 percent of survey respondents think that our tax structure is worse than those of other states, and many believe that this structure is hindering economic growth and contributing to unemployment rates higher than both the national average and those in neighboring states.

Among the strongest recommendations was a reform of the property tax structure in the state. New Jerseyans pay higher property taxes than in any other state. CPAs also advocated for a reduction in the corporate tax rate and reforming the estate and inheritance taxes.

Reforming property taxes has been articulated as a top policy concern for most New Jerseyans and the politicians they elect for decades. And while there have been efforts - rebates and caps and the like - the intransigence of this issue is enormous.

And given the state's fiscal outlook, with an inevitable budget deficit, the sagacity of reducing taxes may be questionable.

But an interesting statistic in the survey indicates that 71 percent of the CPAs surveyed had actually recommended that their clients relocate to another state because of the estate and inheritance tax structure here. Eighty-three percent believed that that structure had compelled clients to leave. And lest you think that fleeing the inheritance tax occurs only among the Thurston and Lovey Howell set, 84 percent of the accountants believe that these taxes affect middle-class New Jerseyans as much as they do affluent ones. …

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