High Taxes Increasingly A Reason To Flee The Garden State

March 18, 2014 by Ben Bullard

A decade of sky-high personal income tax on wealthy residents, coupled with a series of regressive taxes that find other ways to bilk money out of the lower income brackets, threatens to propel an unprecedented rate of emigration out of New Jersey, as residents seek other places to shelter from State government more of the wealth they’ve earned.
That’s the finding of a recent study by Regent Atlantic, a New Jersey-based investment advising firm, which concludes that “the belief that New Jersey has some of the highest income taxes in the nation adds to the growing desire to move out of the state.”
Since 2004, New Jersey has taxed its wealthiest residents — those earning $500,000 or more per year — at a base rate of 8.97 percent, up from a previous base of 6.37 percent. A 2010 study by two Princeton sociologists maintained that the so-called “millionaire’s tax” instituted in 2004 had no detrimental effect on New Jersey’s wealthy population, a finding the Regent study does not explicitly dispute.
Those whom the State forces to pay the “millionaire’s tax” account for only 1 percent of New Jersey’s population — yet that small demographic pays 42 percent of all personal income tax statewide. And 39 percent of New Jersey’s State-collected tax revenues (as opposed to Federal apportionments, etc.) come from the personal income tax.
The new study finds that the income tax, along with onerous estate taxes, property taxes and multiple layers of fees and taxes that predominate at both the municipal and State levels, are driving wealth out of New Jersey as residents find ways to set down legal roots elsewhere — primarily in the less-choking tax environments of neighboring Pennsylvania, and Florida.
And the study cautions that New Jersey will reach a population tipping point, particularly among its wealthiest residents, if the Legislature doesn’t attempt to reform its tax and spending matrix across the board:
While tax migration may currently be more of a threat than an actual problem, it could represent a growing challenge for New Jersey’s future. Several professionals we interviewed believe it is already a major problem for the state. Sam Weiner, a tax attorney with Cole Schotz, says, “New Jersey income and estate taxes have become such a prominent issue that residency has become a prime topic in every other meeting that I have.” Michael Grohman, a tax attorney with Duane Morris, LLP, claims that his wealthy clients are “leaving [New Jersey] as fast as they can.”
…The belief that New Jersey has some of the highest income taxes in the nation adds to the growing desire to move out of the state. The combination of these factors could cause businesses and wealth to leave the state, with New Jersey’s already weak economy continuing to struggle.
Population trends won’t tell the whole story — the study makes no claim that high taxes alone are causing a net population loss. But there are some interesting observations to note about New Jersey’s population and demographic trends since 2000.
Between the 2000 and 2010 census, New Jersey experienced a net population gain of 4.5 percent, less than half the national average of 9.7 percent over the same period. That drop-off came after the State had gained 8.9 percent in the decade between 1990 and 2000. Since 2010, the State’s overall population growth has continued to wane, increasing only .7 percent between 2010 and 2013.
Since 2010, the rate of emigration out of New Jersey has accelerated faster than the influx of immigration — much of it illegal — into the State, and aging baby boomers comprise the fastest-growing native population demographic.

Filed Under: Liberty News, Staff Reports

http://personalliberty.com/2014/03/1...-garden-state/