- - Monday, September 22, 2014

ANALYSIS/OPINION:

New Jersey is bleeding jobs. The state’s Department of Labor last week reported a net of 900 jobs were lost in August, and the figures came out before Atlantic City’s Trump Plaza casino gave the pink slip to a thousand more workers. The Tax Foundation says the state has the second-highest tax burden in the nation, which makes it, economically speaking, a terrible place to live. It’s an even worse place to die.

The death tax makes it an expensive place to mourn the loss of loved ones, and their money, too. Fed-up taxpayers took the steps of the state Capitol in Trenton last week to support a renewed effort to bury the estate tax for good. Groups ranging from the New Jersey chapter of Americans for Prosperity and the CPA Society of New Jersey, from the Commerce and Industry Association of New Jersey to the 60 Plus Association, were there because they’ve seen the damage this tax can do.

A Fairleigh Dickinson University poll of those still working finds that only 32 percent of them intend to remain in New Jersey in retirement. A majority, 52 percent, intend to go somewhere else, anywhere else. Most said it’s the state’s suffocating tax burden and high cost of living that makes leaving so attractive.

With no inheritance tax, no income tax, and no winter blizzards, Florida and Texas have become favorite destinations of New Jersey expatriates. The state’s politicians still haven’t figured out that bad tax policy has measurable consequences.

Even Congress figured that out, raising the exemption limit for the death tax from $675,000 in 2001 to $5.3 million this year. New Jersey kept the lower limit, which means the state still levies death taxes when an estate’s value reaches the average listing price for houses on the market in Bergen County.

This isn’t a tax that affects only the millionaires at the bar at the yacht club. The death tax applies to cars and trucks, boats, stocks, bonds, and savings and checking accounts, though full taxes were paid when these items were purchased. Almost every hard-working New Jersey resident with a paid-off mortgage and car or a few shares of stock in the company where he worked will leave his family with not just one, but two double-tax bills.

Beyond the death tax, New Jersey collects an inheritance tax of between 11 percent and 16 percent on assets left to anyone other than lineal descendants. Maryland is the only other state to impose such a penalty on the heirs of the dearly departed in addition to a death tax.

Last year, the death tax was buried in Indiana, North Carolina and Ohio. It will be phased out in Tennessee by 2016. More pink slips are coming, and the sooner the better.

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