Worst tax systems in the US? New Jersey ranks second
New Jersey has the second worst tax system in the nation, according to a new survey. California ranks number one.
The report, "Business Tax Index 2015: Best to Worst State Tax Systems for Entrepreneurship and Small Business," is put out by by the Small Business & Entrepreneurship Council (SBE Council). The index pulls together 23 different tax measures and combines them into one tax score. All 50 states are then compared and ranked. Among the taxes included are income, capital gains, property, death/inheritance, unemployment and state gas and diesel levies.
"In the five years that we've done the small business tax index New Jersey has either been 49th or 48th. There year the state is 49th," said Ray Keating, chief economist for SBE Council and author of the report. "You can always count on California being at the bottom. If there's something that you want to do wrong on the tax front California is the example and you just don't want to follow that state, but unfortunately New Jersey hangs right there with them."
New Jersey scores low in most of the tax measures looked at in the study, including:
- Property Tax (50th)
- Personal Income Tax (46th)
- Individual Capital Gains Tax (47th)
- Corporate Tax (45th tie)
"What the state needs are some big pluses. They need to make some dramatic tax changes to make New Jersey competitive with the other 49 states in the index," Keating said.
Not enacting a millionaire's tax increase and not eliminating corporate tax breaks were steps in the right direction, but the state still has a long way to go, according to Keating.
"New Jersey does well with a low gas tax (2nd) and sales tax (7th), but when you look at 23 measures those positives are just overwhelmed by so many negatives," Keating explained.
According to the survey, South Dakota, Nevada, Texas, Wyoming and Washington have the five best state tax systems in the U.S. In addition to New Jersey and California, Minnesota, Iowa and Hawaii also rank in the bottom five for the worst state tax systems in the country.