North-JerseyNews.com

New Jersey Residents Will Pay Most in Lifetime Taxes, Study Says

New Jersey residents will pay more in lifetime taxes than residents of any other state, according to a new study.

The study, which comes from financial technology company Self, found that the average New Jerseyan will pay $931,698 in taxes over the course of their lifetime. This total is 77% higher than the $525,037 that the average American will spend on taxes throughout their lifetime and over $100,000 to the next closest state. Residents of Massachusetts and Connecticut will face the second and third highest tax burdens over their lifetimes, paying an average of $827,185 and $805,213 respectively.

Self said that the bulk of the average New Jersey resident’s lifetime tax payments—$508,045— would come from tax on earnings, while $378,087 would come from property tax payments. An additional $30,789 would come from tax on personal expenses and $14,777 would come from fees on cars.

Highest Property Taxes

New Jersey residents can expect to pay the highest in lifetime property taxes of all the states and the fourth most in lifetime taxes on earnings, according to the study.

Altogether, the study estimated that the average New Jersey resident would earn nearly $1.89 million over the course of a lifetime and then pay out nearly half of those earnings—49.5%—in taxes. The average American, overall, can expect to spend 34.3%, or just over one-third of the income, over a lifetime in taxes.

Neighbors Face Lower Tax Burden

Residents of New Jersey’s neighbor to the north, New York, can expect to face the seventh highest lifetime tax burden—an average of $734,563 in lifetime tax payments, according to the study. Residents of New Jersey’s western neighbor, Pennsylvania, were expected to pay the 18th highest amount in lifetime taxes. Delaware residents were expected to pay the 26th highest amount.

High taxes in New Jersey and some other states, have added contention to the U.S. congressional infrastructure discussions over President Joe Biden’s American Jobs Plan with House Democrats from New Jersey and other high-tax states threatening not to support Biden’s plan unless it includes a repeal or at least an increase in the $10,000 cap on the federal tax deduction for state and local tax (SALT) payments. The SALT deduction cap was included in former President Donald Trump’s 2017 Tax Cuts and Jobs Act.

Head for the Mountains?

New Jersey residents looking to escape high taxes might try heading for the mountains of West Virginia. Self reported that the Mountain State boasts the lowest lifetime taxes. Residents there will pay an expected average of $321,000 over the course of their lives. Alabama residents can expect to pay the second-lowest, lifetime amount ($322,419) and Arkansas residents can expect to pay the third-lowest amount ($331,023).

Self’s study analyzed the 2019 Consumer Expenditure Report from the Bureau of Labor Statistics.

For the third straight year, New Jersey was the number one state in the United States that people moved out of, according to a separate study—the 2020 National Migration Study by United Van Lines. United Van Lines found that 70% of their clients in New Jersey asked for moving services so they could leave the state. In contrast, Idaho had the highest percentage of people seeking their help to move into the state.

4 comments

  1. New Jersey: Number One in Covid deaths/population and Number One in taxes! And there is probably a connection between the deaths and taxes: too many substantively incompetent bureaucrats, too many retired incompetent bureaucrats and too many mediocre public officials, all feeding at the public trough and unable to act in an emergency.

    No wonder citizens who can are abandoning New Jersey.

  2. The article is completely correct about the level of taxation in New Jersey, but it seems to completely ignore that pay and salaries are dramatically higher here than in almost all other areas of the US. The compensation I receive for my professional services in NJ is dramatically higher than I could make elsewhere. And I am not speaking of my compensation in NJ being slightly higher here than elsewhere; I am speaking of differences 100% to 200% higher. There are two sides to this coin!

  3. Mr. Kovalcin is correct. NJ is consistently in the top 3 of the list of richest states. The states with the lowest taxes are also the poorest. West Virginia is one of the ten poorest states. Our problem is that we receive less federal money than any other state and we have more municipalities per capita than any other state. If we could cut the number of municipalities in half by merger we could probably save a lot of money in taxes. We should also consider getting rid of county governments and have their duties taken over by the state or municipalities. Except for the clerk and surrogate’s office it’s another layer of government we don’t need.

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