Because of legislative changes made in 2013, New Jersey’s surge in corporate tax subsidies has risen to unprecedented levels, further cramping New Jersey’s ability to invest in schools, transportation and other areas known to be greater drivers of job creation. This policy shift comes with an enormous financial reward to very few corporations and an enormous cost to Garden State taxpayers. But it doesn’t have to be this way. In fact, 10 key reforms – from forcing policymakers to actually pay for the tax breaks that happen on their watch to reducing the focus on retaining jobs that are already in New Jersey – could help rebalance the scales and ensure a more responsible approach to economic development in the Garden State.
Economists consistently find that a well-educated workforce and a high-quality transportation system are among the bedrock elements upon which a prosperous state economy is built. Providing everyone with access to the education and training they need to reach their full potential boosts the productivity of individual workers and strengthens the overall economy. A well-functioning transportation system likewise strengthens the economy, allowing goods and people to move quickly and reliably to the places they need to be. (For a more detailed discussion of the impacts of state investments in education and transportation, see MassBudget’s report on these issues.)
While the economic importance of high-quality transportation infrastructure and public education are widely recognized, some fear that raising taxes to fund such investments could lead to high-income taxpayers leaving the state—particularly if tax increases are focused heavily on these high-income households. Fortunately, because there is wide variation in tax rates among the 50 states, economists have ample data with which to study this question. The most thorough studies have found consistently that tax rates influence the residence decisions of only a very small share of such households. Instead, high-income people—like other people—overwhelmingly choose where to live based on work and business opportunities, family and social connections, and the draw of an agreeable climate. The vast majority do not make their residence decision based on state tax rates. In this policy brief we examine the evidence on the likely migration effects of raising income taxes on high-income households—those with taxable annual income above $1 million—and the impacts on net state revenue.
This report summarizes findings from the Hawai‘i Appleseed Center for Law & Economic Justice and QMark Research poll conducted in 2016 that revealed that nearly half of Hawai‘i families are living paycheck to paycheck.
It also found that six out of seven survey respondents support the concept a tax credits that let working families keep more of what they earn. In Hawai‘i, there are many working families who are doing their best, but could use assistance. A Working Family Credit is one way to help them. Read the full report.