Tax Foundation: NJ 49th Among States for Tax Competitiveness: Bottom Two for Nine Years in a Row and Every Year Under Gov. Murphy

The Tax Foundation came out with its 2025 State Tax Competitiveness Index and once again New Jersey has one of the least competitive tax structures in the nation, coming in 49th out of 50, with only New York as less competitive.  By comparison, neighboring states Pennsylvania and Delaware came in 34th and 18th, respectively.  The Tax Foundation renamed its index (which it has been calculating since 2003) and tweaked its methodology slightly in order to focus on tax competitiveness between the states.  Not much changed for New Jersey: suffice it to say that New Jersey has been 49th or 50th for nine years in a row and for every year under Gov. Murphy.

Here are the details for New Jersey 2025 ranking:

• Corporate taxes: 44
• Individual Income taxes: 48
• Sales Tax: 35
• Property Tax:  43
• Unemployment Insurance Tax: 50
• Overall: 49

Under the new methodology, here are New Jersey’s rankings for the past five years, where it has battled with New York for last place:

• 2020: 50
• 2021: 50
• 2022: 49
• 2023: 49
• 2024: 49

Here is New Jersey’s 2025 ranking compared with neighboring states with which it completes for business:

• NJ: 49
• NY: 50
• PA: 34
• DE: 18

Finally, here are the top five and bottom five states:

Top five: Wyoming, South Dakota, Alaska, Florida, Montana.

Bottom five: Maryland, Connecticut, California, New Jersey, New York.

As with Truth in Accounting‘s 2024 national ranking of long-term financial condition, there is a pattern: ALL the top states are smaller government, low-tax, with less powerful government unions.  ALL of the bottom states are big government, high-tax, with more powerful government unions.

The salient common characteristic of the bottom states are powerful government unions that have rigged the system to siphon off tax dollars and then used those tax dollars to elect largely Democratic politicians.  Those Democratic politicians then increase government spending and taxes.  That’s why they are politically “blue” states: Great for the government unions and Democratic pols, but terrible for the rest of the state.

Just like New Jersey under Phil Murphy and the Democrat-controlled legislature.