New Jersey has some of the highest tax rates in the nation. News that the state’s wealthiest resident has moved to a state with much lower tax rates has caused some lawmakers to call for changes to New Jersey’s tax structure.
It is not known for certain why hedge fund manager David Tepper decided to move his residence and business operations from New Jersey to Florida recently. Tepper was believed to be New Jersey’s richest resident with an estimated net worth of $10.4 billion.
Many New Jersey lawmakers, however, have placed the blame of their state’s tax structure.
New Jersey has the lowest state estate tax exemption in the nation at only $675,000. It has the highest property tax rates in the U.S. It has a top income tax rate of 8.97%. Additionally, New Jersey is one of only two states in the country to have not only an estate tax but also an inheritance tax.
Florida, on the other hand, has neither an estate tax nor an income tax.
The Inquirer reported this story in “Billionaire’s move puts New Jersey tax rates in spotlight.”
While Tepper’s move has many state lawmakers concerned about the state’s high taxes and the loss of revenue from wealthy citizens moving to states with lower tax burdens, it is not certain that any changes to the state’s taxes will be forthcoming. To date, the Republican governor and Democratic controlled legislature have been unable to reach agreements about changing the state’s tax code.
Also, it is also not clear how much revenue the state is losing overall.
In the past few years the percentage of New Jersey residents with incomes exceeding $1 million has increased. However, the ability of wealthy residents to move to avoid state estate taxes has many state legislatures concerned about their own respective state tax rates.
Reference: The Inquirer (April 10, 2016) “Billionaire’s move puts New Jersey tax rates in spotlight.”
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