New Jersey Chamber of Commerce Executive Vice President Michael Egenton's Statement on Proposed State Budget Following His Testimony at the Assembly Budget Committee
One thing we know to be true is that in order for our economy to flourish, we have to be competitive. How do we stay competitive? With a smarter, more strategic and practical approach.
One way to accomplish this goal is to offer economic incentives. We support programs to incentivize businesses to come to New Jersey, to stay here, and to grow here. We fully recognize the need for accountability and transparency; at the same time, we strongly believe our state needs a robust economic development initiative to remain competitive with our surrounding states and globally.
It’s no secret that businesses of all sizes are still dealing with the tax increases and various mandates from the last year. Many businesses are choosing whether to cut costs, raise rates, move elsewhere, or close-up shop altogether. Small- and medium- size businesses have been hit the hardest with the recent enactment of mandated paid sick leave, the expansion of paid family leave, and the increase in minimum wage.
That's why the New Jersey Chamber of Commerce strongly opposes increasing the tax rate on those who make the investments and create new jobs in New Jersey. A so-called 'millionaire's tax' would impact businesses of all sizes, including sub S corporations. Owners of small businesses may look like millionaires on paper, but they invest that money back into their company and their employees. If we venture down this road again, we risk losing the entrepreneurs and job-providers that contribute a considerable amount of revenue to the general fund.
It is worth noting that a recent analysis by the Tax Foundation stated, “The millionaire’s tax violates principles of stability and neutrality, while doing nothing to solve the state’s current problems with complexity and lack of transparency. It makes the state budget even more reliant on high earners, creating a more volatile source of revenue.”
In relation to the size of this proposed budget, the revenue from this tax increase is minimal; however, the impact that it will have on our job creators would be tremendous. We cannot afford to lose these entrepreneurs to other business friendly states. As these budget discussions continue for the next several weeks, we encourage legislative leaders to look for additional cost-savings to offset this tax.