The fight over a millionaire’s tax and a corporate business tax is loud and boisterous in Trenton, as Gov. Phil Murphy battles it out with the Democratic leaders of the Legislature.
The discussion is just as boisterous in boardrooms across the state, but, so far, top executives are not willing to speak publicly on the matter.
“I think we need to see how much of this is political posturing and how much of this is real,” said one executive.
To be clear, business leaders are not happy with either option. But the plan to raise the state’s corporate business tax to the highest in the nation is drawing more ire.
“What are they thinking?” said one.
“Who thinks this is a good idea?” said another.
“It’s hard enough to attract companies here in the first place — that’s why incentives are so important — but this would wipe out any benefit of the incentives.”
On Tuesday afternoon, Senate President Steve Sweeney (D-West Deptford) and Assembly Speaker Craig Coughlin (D-Woodbridge) reiterated their proposal to increase the state’s corporate business tax, which currently sits at 9 percent, for a two-year period.
Smaller companies (those with revenues between $1 million and $25 million) will see a jump of 2.5 percentage points, to 11.5 percent. Larger companies (those with revenues of more than $25 million) will see a jump of 4 percentage points, to 13 percent.
Murphy has proposed increasing the millionaire’s tax from 8.97 percent to 10.75 percent.
Left unsaid is how any of this may impact Amazon, which lists Newark as one of its 20 finalists for its HQ2 project.
The company will not be subject to any tax increase. For starters, the corporate tax will have expired before Amazon is fully engaged here. In addition, due to the $7 billion incentive package it was offered, it would have been excluded.
And, to be clear, while we remain supportive of that incentive package, it does bring Amazon into this argument.
For starters, behind closed doors, officials and business leaders are wondering whether Amazon’s interest in Newark will wane in light of taxing-the-rich proposals from the executive and legislative branches of state government.
That would be a huge miss for the state and Newark if that were the case.
But it might be a better option than if it does come.
How will companies who have been helping the New Jersey economy (some, for decades) and now potentially getting socked by the tax increase feel about Amazon being exempt?
In the end, it may not matter either way.
One person said Amazon likely has avoided publicly commenting on the political fight —- if it had any inkling to do so — to avoid being viewed negatively.
But don’t view its silence as submission.
Amazon has been vocal against potential tax increases in its home state of Washington.
The company has railed against a “head tax” that would make companies with more than $20 million in annual revenue pay an annual $275 tax per employee. In 2010, CEO Jeff Bezos also funded opposition to a wealth tax in Washington state.
One has to wonder if this Garden State dust-up will impact the company’s decision.
(Anjalee Khemlani contributed to this report.)