Remember Joe Piscopo’s immortal line on Saturday Night Live about encountering a fellow citizen of New Jersey: What exit?
The punchline is no longer a joke. According to a recent study, Garden Staters are heading to the exits — and taking their wealth with them. Called “Exodus on the Parkway,” the study dates the flight to 2004, when then-Gov. James McGreevey signed into law the so-called “millionaire’s tax.”
It’s no secret that New Jersey has taxes high above the national average. The Tax Foundation ranks Jersey third highest in individual income taxes and second in property taxes. The new study adds its own findings: for example, because the state refuses to let businesses carry forward losses, some people pay more in New Jersey state taxes than they do in federal taxes.
But this study is interesting more for the human stories than for the numbers. That’s probably because it was conducted by Regent Atlantic, a wealth-management firm, rather than a think tank or government. And the comments by taxpayers and tax advisers alike make for a compelling read.
“Of the high net-worth clients that I have had, I would say that 95 percent have left the state of New Jersey,” says an accountant. A partner at a law firm says, “For our clients who haven’t left, it’s a common point of discussion.” A Regent Atlantic client says he left specifically because of the state’s tax treatment of his losses. “That’s what broke my back, and I said, ‘That’s it. I’m getting out.’ ”
Everywhere in New Jersey, in short, people are having conversations and dealing with the reality of a tax system sending the state’s most successful people elsewhere.
Everywhere, alas, but Trenton.