Assemblyman Christopher DePhillips is looking to make New Jersey more business friendly.
DePhillips (R-Bergen), along with GOP colleagues John DiMaio and Serena DiMaso, introduced a bill to gradually cut the corporate business tax (CBT) to a flat 2.5%.
“The reason we need a tax incentive program to attract businesses is because taxes are too high,” said DePhillips (R-Bergen). “The simple answer is to lower the rate to a point that makes New Jersey more attractive financially than other states.”
In the first year, the tax rates for businesses earning below $100,000—subject to the 7.5% and 6.5% rates—would lower to 3.5 % and the second year to 2.5% and remain there.
Top Rate 2.5%
The top 9% rate on income over $100,000 would decrease to 7%t the first year, 5% the second year, 3% the third year and 2.5% in the fourth year and remain there.
DiMaio pointed to the decision in 2013 where North Carolina lowered their taxes while New Jersey reformed its tax incentive programs.
“In the years after, North Carolina’s economy boomed and New Jersey was one of the nation’s slowest growing economies. Cutting taxes creates jobs and grows the economy, and that’s what this bill will do,” stated DiMaio.
North Carolina Model
After North Carolina’s tax code was reformed to 2.5%, iit had the fastest Gross Domestic Product growth and one of the fastest growing populations in the country from the first quarter of 2013 through the third quarter of 2015. New Jersey had one of the slowest rates of economic and population growth over that same period.
The Tax Foundation has ranked New Jersey the nation’s worst business climate for five consecutive years. It was ranked 49th in the country in 2013, then became 50th after the Economic Opportunity Act. North Carolina went from the 44th ranked business climate before their tax reforms, to now being ranked the tenth best place to do business nationally.