Daily Archives: February 2, 2010

Wealthy Residents Flee New Jersey by Gregory Hilton

The Garden State is coping with a massive budget deficit, and tax revenues have been declining because of the recession. Another major reason is that wealthy residents have been leaving the state because of significant increases in income, sales, property and “millionaire” taxes. According to the Wall Street Journal, New Jersey “was once a fast-growing state but has now joined California and New York as high-tax, high-debt states with budget crises.” Prior to 1976, there was no state income tax and now it is 10.75%. The top 1% of taxpayers pay more than 40% of the state’s income tax.
More than $70 billion in wealth left New Jersey between 2004 and 2008 as affluent residents moved elsewhere, according to a report by the Center on Wealth and Philanthropy at Boston College. The report shows that about 302,780 households left New Jersey between 2004 and 2008, and the average net worth of the departing households was $618,330. These wealthy residents have been moving primarily to Florida and Pennsylvania and their departure is a dramatic change for a state once considered the nation’s wealthiest. “The wealth is not being replaced,” said John Havens, who directed the study. “It’s above and beyond the general trend that is affecting the rest of the northeast.”
“This study makes it crystal clear that NJ’s tax policies are resulting in a huge decline in the state’s wealth,” said Dennis Bone, chairman of the state Chamber of Commerce and president of Verizon NJ. “That’s probably why we have these massive income shortfalls in the state budget, especially this year,” he said. Until the tax structure is improved, he said, “we’ll probably see a continuation of the trend, until there are no more high-wealth individuals left.”