What's the Rush? Costly Tax Changes Need More Deliberation

By Mary E. Forsberg

With the stock market convulsing and financial news seemingly growing worse by the day, Governor Corzine and the New Jersey Legislature have put forward a number of proposals described as designed to ease the impact of the crisis on this state’s wellbeing and stimulate economic activity.

Several of these initiatives involve making significant changes to the system under which New Jersey assesses taxes on businesses in the state–including some measures that would undo reforms implemented in the state’s 2002 overhaul of corporate taxes.

In this atmosphere of emergency, some of the legislation is moving with less deliberation than might be expected of tax changes that, when fully implemented, would likely cost the state at least $400 million a year in lost revenue. That is in addition to declines in state sales and personal income tax revenue that New Jersey officials predict will result from the economic downturn.

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