Tax Foundation 2026 Competitiveness Rankings: NJ Is 49th Out of 50 States and in the Bottom Two for Every Year of Gov. Murphy’s Tenure

The Tax Foundation came out with its 2026 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 — exactly as badly as New Jersey has fared for the last four years. There is no better measure of Gov. Murphy’s unfriendly posture towards New Jersey’s private sector: New Jersey has been 49th or 50th for ten years in a row and for every year under Gov. Murphy.  As Murphy finishes his undistinguished and unpopular tenure as governor, let us say again that he was a status quo governor: he was elected with the substantial help of New Jersey’s powerful government unions — especially the NJEA — and has largely governed for their benefit.  The Tax Foundation’s rankings say it all.

Here are the details for New Jersey 2026 ranking:

• Corporate taxes: 44 (unchanged)
• Individual Income taxes: 48 (unchanged)
• Sales Tax: 34 (from 35)
• Property Tax:  42 (from 43)
• Unemployment Insurance Tax: 46 (from 50)
• Overall: 49 (unchanged)

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

• 2021: 50
• 2022: 49
• 2023: 49
• 2024: 49
• 2025: 49

Finally, here are the Tax Foundation’s top ten and bottom ten states.

Top ten:

1. Wyoming
2. South Dakota
3. New Hampshire
4. Alaska
5. Florida
6. Montana
7. Texas
8. Tennessee
9. Idaho
10. Indiana

Bottom ten:

1. Hawaii
2. Vermont
3. Massachusetts
4. Minnesota
5. Washington
6. Maryland
7. Connecticut
8. California
9. New Jersey
10. New York

Just like the Truth In Accounting rankings.  As with Truth in Accounting‘s 2025 national ranking of long-term financial condition, where New Jersey also ranked 49th and has been in the bottom five for every year of Murphy’s tenure, there is a pattern: ALL the top five states are smaller government, lower-tax, with less powerful government unions — in a word, “red” states.  ALL of the bottom five states are big government, high-tax, with more powerful government unions — in a word, “blue” states.

Under Murphy, New Jersey is big-government, high-tax “blue” state. The salient common characteristic of the Tax Foundation’s bottom ten 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. And that’s why so many of these “blue” states are seeing large outmigrations of people, businesses, and wealth to many of the “red” states.

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