Another Study Rates Teachers’ Pension Fund As One of the Worst in the Nation; 2021’s Stellar Returns Won’t Change That
December 7, 2021
NJ Has the Worst Business Tax Climate for the 7th Straight Year; Does Gov. Murphy Even Care?
January 4, 2022That’s what the IRS data shows: people and wealth continue to flee NJ. According to a study by the National Taxpayers Union Foundation, in 2019, 16,947 taxpayers left NJ, taking $3.1 billion in Adjusted Gross Income (AGI) with them, both of which are 4th-worst in the nation. Only high-tax, Blue NY, CA and IL had larger outmigrations of taxpayers and wealth.
But this actually understates the problem because the $3.1 billion that left NJ was only for 2019. It is highly likely that the leaving taxpayers will not return, so that AGI will be gone for 2020, 2021, 2022 and into the future. Given that many of the leavers are retirees, and given that retirement lasts 10-20 years, the real lost income is likely in the tens of billions.
The study also found strong correlations between high-tax states and outmigration and low-tax states and in-migration. The bottom ten (outmigration) states had an average top income tax rate of 6.7% and state/local tax rate of 11.1%. This contrasts with average rates for the top ten (in-migration) states of 2.9% and 8.9%, respectively. That’s quite a difference.
And it is the wealthy who are leaving NJ: the average AGI of the leavers is $183,159. And yet Gov. Murphy raised taxes (again) on the wealthy in 2020 and has done nothing to decrease NJ’s massive debt burden, which portends future tax increases. So we can expect the steady outflow of people and wealth to continue. Multi-millionaire Murphy will of course be long gone by the time the reckoning comes, but what about the NJ citizens who can’t leave? Sunlight asks again: Does Murphy even care?
Below are the bottom ten states for outmigration.
| State | Top Income Tax Rate | State-Local Effective Tax Rate | Net Change in # of Taxpayers | Net Change in AGI (millions) |
| NY | 8.82% | 14.1% | (73,837) | $(8,720) |
| CA | 13.30% | 11.5% | (71,547) | $(8,809) |
| IL | 4.95% | 11.1% | (42,681) | $(5,939) |
| NJ | 10.75% | 11.7% | (16,947) | $(3,104) |
| MA | 5.05% | 10.5% | (14,925) | $(1,453) |
| MI | 4.25% | 10.0% | (11,607) | $(1,129) |
| MD | 5.75% | 11.8% | (9,913) | $(1,853) |
| OH | 4.80% | 10.3% | (9,730) | $(1,627) |
| PA | 3.07% | 10.4% | (9,546) | $(1,711) |
AVERAGE: 6.7% 11.1% TOTAL: (270,141) $(34,900)
Here are the top-ten states for in-migration:
| State | Top Income Tax Rate | State-Local Effective Tax Rate | Net Change in # of Taxpayers | Net Change in AGI (millions) |
| FL | 0.00% | 8.8% | 61,873.00 | $17,488 |
| TX | 0.00% | 8.0% | 51,359.00 | $3,906 |
| AZ | 4.50% | 8.7% | 35,654.00 | $3,679 |
| NC | 5.25% | 9.5% | 24,712.00 | $2,752 |
| WA | 0.00% | 9.8% | 20,742.00 | $1,080 |
| SC | 7.00% | 8.9% | 19,456.00 | $2,561 |
| NV | 0.00% | 9.7% | 18,538.00 | $2,031 |
| TN | 2.00% | 7.0% | 17,849.00 | $1,888 |
| GA | 5.75% | 8.9% | 16,722.00 | $409 |
| CO | 4.63% | 9.4% | 16,448.00 | $1,988 |
AVERAGE: 2.9% 8.9% TOTAL: 283,353 $37,800