Calling the recently enacted tax cuts a game-changer for the state’s economy and retirees, New Jersey Business & Industry President & CEO Michele Siekerka on Wednesday joined business groups, AARP, and legislators for a roundtable forum highlighting the positive impact that the new laws will have on New Jersey’s economy and senior citizens’ financial ability to stay here.
“The Estate Tax and the state tax on retirement income are major drivers of outmigration for New Jersey businesses and older residents,” Siekerka said, noting New Jersey has had a well-deserved reputation for being a state that is too expensive to retire in or die in.
“The new laws prioritize New Jersey’s most pressing needs, and also ensure we are taking the first step toward comprehensive problem-solving in addressing the reasons so many of our businesses and residents leave the state and take their wealth with them,” Siekerka said. “IRS figures show that $21 billion in adjusted gross income has left New Jersey in the last 11 years, and these tax changes will entice more residents to stay here and spend their money here.”
Siekerka noted that in 2013-14 alone, if 20 percent of those age 45 and older who left New Jersey had actually stayed here, it would have resulted in a half a billion dollars in additional adjusted gross income flowing through our state’s economy, along with 2,000 jobs and $300 million in economic activity.
The Estate Tax, which can force the children of small business owners to liquidate the family business to pay the tax, has had a major impact on business decisions about locating in New Jersey or expanding here, Siekerka said.
“Our 2016 Business Outlook Survey found that two-thirds of our members take the estate and inheritance taxes into consideration when making their business decisions and a similar percentage said they would not retire in New Jersey,” Siekerka said.
The new law raises the current $675,000 Estate Tax exemption to $2 million in 2017 and completely abolishes the tax in 2018. The threshold for taxing retirement income will change from $15,000 to $75,000 for single senior citizens and from $20,000 to $100,000 for married couples by 2020.
The reauthorization of the Transportation Trust Fund (TTF), which gets stalled road and bridge repairs moving again, is a necessary investment in the state’s infrastructure that will stimulate the economy to the benefit of all of the state’s residents, Siekerka said.
“It’s not just the construction jobs and the secondary jobs that are created, but also the jobs that will be created from our ability to further grow New Jersey’s redevelopment opportunities that attract new jobs and the expansion of existing businesses,” Siekerka said.
“The bipartisan collaboration on difficult issues such as the TTF sends a message that Trenton is ready and willing to tackle the next round of complex issues,” Siekerka said. “NJBIA applauds the courage of our leaders and looks forward to working with them on continued comprehensive tax reform.”
Other participants at the roundtable forum at the Statehouse were: Senate President Sweeney, Senator Paul Sarlo, Senator Steve Oroho, Assembly Majority Leader Louis Greenwald, the NJ Society of CPAs, the Financial Planning Association of NJ, the Southern NJ Chamber of Commerce, AARP, the NJ Chamber of Commerce, the Rutgers Economic Advisory Service, and the African American Chamber of Commerce.