Lawmakers voted today to amend the Transportation Trust Fund (TTF) reauthorization and tax reform bills to reflect the bipartisan compromise that was reached last Friday and will vote on final passage this coming Friday.
NJBIA supports the compromise legislation because it provides long-needed comprehensive tax reform along with reauthorizing the Transportation Trust Fund. Specifically, the legislation would eliminate the estate tax, reduce the sales tax, and increase the amount of retirement income excluded from taxation.
“Responsible investment in the state’s infrastructure is critical. This legislation recognizes the need to balance that investment in a way that offsets other taxes New Jerseyans pay—taxes that affect New Jersey’s ability to be competitive and to attract and retain our businesses and our residents,” said NJBIA President and CEO Michele Siekerka in prepared statement released yesterday.
NJBIA has been campaigning for Estate Tax reform because of its impact on small businesses and because it is a driver of wealth outmigration that hurts New Jersey’s economy.
“We are very pleased this bill includes the total elimination of the Estate Tax by January 1, 2018 and a substantial increase in the income tax exclusion for retirement income,” Siekerka said. “These provisions in the bill will go a long way toward making us more competitive with our neighboring states and keep our residents here instead of seeing them move to New York and Pennsylvania, the top two outmigration states,” Siekerka said.
NJBIA’s 2016 Business Outlook Survey indicated that two-thirds of members took the estate and inheritance taxes into account when making business decisions and a similar percentage would not make New Jersey their domicile in retirement. This bill directly addresses both issues.
Further, NJBIA’s 2016 outmigration report found that more than $18 billion in adjusted gross income left the state during the last decade. If just 20 percent of those ages 45 and over who left the state in 2013 had stayed, more than half a billion dollars in adjusted gross income would have stayed here with them, along with 2,279 jobs and $349 million in economic activity.
This bill will also make the state more attractive for retirees, who now will earn their pensions tax-free up to $75,000 as a single taxpayer or $100,000 as a couple. This rise in the current threshold, which is now $15,000 for an individual or $20,000 for a couple, is significant for retirees, many of whom live on a fixed income.
“For too long our retirees have moved to Pennsylvania, New York or Florida simply because it made no financial sense to stay here,” Siekerka said. “Now we are finally beginning taking steps that should stem that tide.”
If approved, it would breath life in the bankrupt TTF and restart hundreds of road, bridge, and other transportation infrastructure construction projects that were halted after the fund went broke two months ago.
The reauthorization deal would provide $2 billion per year for the next eight years for construction and maintenance of roadways, bridges, ports, railways and airports.Related Articles: