CPA Poll Finds Gridlock Suffocating NJ Economic Growth

On Jan 6, 2016

The fourth annual survey of CPAs commissioned by the New Jersey Society of Certified Public Accountants (NJCPA) and the Pennsylvania Institute of Certified Public Accountants (PICPA) finds that governmental overregulation and legislative gridlock stunt economic growth at both the federal and state levels.

U.S. Outlook

A total of 51 percent of New Jersey respondents feel the national economy is about the same as it was one year ago, which is a 6 percent increase from last year. Also, 53 percent of those respondents expect the U.S. economy to be about the same one year from now, which is 2 percent higher than last year.

New Jersey Outlook

Closer to home, 51 percent of Garden State respondents feel the New Jersey economy is about the same as one year ago, and 55 percent expect it to be about the same one year from now.

Gridlock

CPAs are clearly frustrated at the slow-moving wheels of government. A staggering 92 percent of New Jersey respondents feel government gridlock and 88 percent feel federal regulations have had a negative effect on the U.S. economy during the past 12 months.

In New Jersey, 78 percent of CPAs believe the state’s business climate hinders economic growth. These same professionals say their largest internal (28 percent) and external (42 percent) obstacles are government regulation.

Employment

Jobs — the driving engine of economic growth — fared prominently in this study. Over the next 12 months, 62 percent of New Jersey CPAs feel their clients’ workforce will not change (versus 55 percent last year). And 56 percent feel salaries at those clients will remain the same or decrease.

Respondents feel the main factors that contribute to New Jersey’s high relative unemployment are companies leaving the state (52 percent) and the New Jersey tax climate (50 percent).

Taxes

Nearly nine in 10 (89 percent) of New Jersey CPAs feel that the state’s tax structure is worse than most other states, and 74 percent have actually advised a client to consider relocating out of New Jersey due to its estate and inheritance taxes.

New Jersey CPAs offered these tax-reform measures to help provide for greater economic expansion and job growth potential in the Garden State:

Reduce Property Taxes
Ranked Top: 31%
Ranked Second: 24%
Ranked Third: 13%
Ranked in Top Three: 68%

Reform NJ’s Estate & Inheritance Taxes
Top Ranked: 16%
Second Ranked: 23%                                                                                                                                                       Ranked Third: 16%
Ranked in Top Three: 55%

Cut Gross Income Tax Across the Board
Top Ranked: 16%
Second Ranked: 15%
Third Ranked: 9%
Ranked in Top Three: 40%

Reduce NJ’s Corporate Business Tax
Top Ranked: 12%
Second Ranked: 13%
Third Ranked: 10%
Ranked in Top Three: 35%

Raise Gas Tax to Fund Infrastructure
Top Ranked: 12%
Second Ranked: 10%
Third Ranked: 9%
Ranked in Top Three: 30%

Expand the Tax Base
Top Ranked: 6%
Second Ranked: 8%
Third Ranked: 7%
Ranked in Top Three: 21%

Raise the Marginal Rate on Income Above $1 Million
Top Ranked: 5%
Second Ranked: 6%
Third Ranked: 4%
Ranked in Top Three: 15%

“While some (not all) key indicators are trending into more positive territory, it’s a trickle, not the surge our economy needs,” says NJCPA CEO and Executive Director Ralph Albert Thomas, CGMA. “Unfortunately, New Jersey can often be its own worst enemy. Overtaxation and gridlock are causing unprecedented outmigration of businesses and individuals from New Jersey. Business leaders and legislators need to work together now to stop tax-base migration, before our state’s economy is irrevocably harmed.”

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