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Liberty Library

Liberty Library

July 02, 2012

Americans for Prosperity is proud to offer a selection of reports on issues critical to understanding government policies affecting the state and the effects these policies have on the economy. These studies are the product of extensive research by some of the best minds in the field of government policy.

Making New Jersey Competitive Again Our sister organization, AFP Foundation’s Making New Jersey Competitive Again booklet is a comprehensive guide to the state’s dire fiscal condition, graphically illustrating a wealth of data and statistics on job growth, taxes, spending, debt and more. The guide is an invaluable resource for citizens and legislators, detailing how years of excessive taxation, regulation and debt have driven New Jersey’s economy to the brink.

Making New Jersey Competitive Again: Putting the garden State back on the road to growth

Freedom in the 50 States: An Index of Personal and Economic Freedom | Mercatus Center – George Mason University

The Mercatus Center at George Mason University has issued an evaluation all of 50 U.S. states on a comprehensive index of economic and personal freedom. The economic index includes data through 2011 and is composed of both fiscal and regulatory measures. Twelve different weighted components are included, with the state’s overall tax burden representing more than 28% of the equation. Other major components include government spending and debt, real property rights, health insurance and labor market.

According to Mercatus’ Index of Economic Freedom, New Jersey is ranked 48th in the nation, with only California and New York fairing worse. Worse yet, New Jersey’s economic deterioration has been swift and precipitous, mostly occurring over the past decade (2001-2011).

Click here to access the full report: Freedom in the 50 States: An Index of Personal and Economic Freedom | Click here to link directly to the New Jersey summary.

New Jersey Tax Rankings: Tax Foundation

  • New Jersey ranks 49th in the Tax Foundation’s 2014 State Business Tax Climate Index
  • New Jersey’s State and Local Tax Burden ranks 2nd Highest in the Nation ($6,675 per capita, 12.3% of income)
  • New Jersey’s State & Local Property Tax Burden as a Percentage of Home Value ranks Highest in the Nation (2.09%)
  • New Jersey’s State & Local Property Tax Burden ranks Highest Per Capita in the Nation ($2,893 per capita)
  • New Jersey‘s 9% Corporate Income Tax ranks 6th Highest In The Nation
  • New Jersey has the 3rd Worst Individual Income Tax with the 6th Highest Top-End Rate In The Nation (8.97%) 
  • New Jersey’s 7% Sales Tax ranks 5th Highest in Nation 
  • New Jersey’s Cigarette Tax ranks 8th Highest in Nation  ($2.70/pack)
  • New Jersey’s State Debt ranks 5th in the Nation Per Capita ($7,328 per person)
  • Tax Freedom Day in New Jersey will occur on May 9, 2014 (4 days later than in 2013)!

New Jersey Tax Climate | Annual State and Local Tax Burden | 2014 State Business Tax Climate Index | Tax Foundation’s 2014 Facts & Figures: How Does Your State Compare?

Americans for Prosperity Foundation – “Need to Know” Policy Papers Thanks to the policy experts at our sister organization, Americans for  Prosperity Foundation, citizens can learn about an array of public policy issues from a free-market economics perspective. CLICK HERE to explore this treasure trove of insightful and educational memos on  issues from budgets and spending, taxes, health care and more.

Americans for Prosperity 2010-2011 Taxpayer Scorecard Available at www.TaxpayerScorecard.com

Click here to see the results of AFP’s Midterm Taxpayer Scorecard for the 2012-2013 Legislative Session!

Americans for Prosperity’s Taxpayer Scorecard provides taxpayers with a critical measuring stick for evaluating their legislators’ performance in  Trenton. The 2010-2011 Taxpayer Scorecard rated legislators with respect to  their votes on over 80 critical fiscal measures affecting New Jersey’s tax and  business climate, covering issues from taxes, to spending, to environmental  mandates, the government takeover of health care and more.

Simply put, the Taxpayer Scorecard is the premier fiscal legislative  scorecard in the state, unmasking the Taxpayer Heroes and Taxpayer Zeroes in Trenton!

Click here to read or download  AFP’s 2010-2011 Taxpayer Scorecard!

The Crisis in Public Sector Pension Plans: A Blueprint for Reform in New Jersey | Mercatus Center – George Mason University

New Jersey’s pension  system is in a state of crisis. As this Mercatus report indicates, the pension  system’s liability is closer to $173B than the oft-reported $45B when truer  actuarial standards are applied. Time is running out to fix the pensions system,  which could become insolvent between 2013 and 2019. With few options left to  avoid a fiscal catastrophe, Mercatus calls for reducing or freezing cost of  living adjustments (COLAs) and transitioning non-vested workers to defined  contribution plans to help address the crisis. Read the full report here.

United Van Lines Report: More People Moving Out Of New Jersey Than Other  State

A consequence of New Jersey’s suffocating tax climate, the state led the nation in outward bound migration in 2013 according to United Van Lines’ 37th Annual Migration Study. New Jersey’s out-bound rate was 64% last year, 2% higher than in 2012. Put another way, for every 1 person moving into New Jersey close to 2 are moving out. This is the third time in the last four years that New Jersey ranked as the nation’s #1 outbound migration state.

Click here to read the United Van Lines report.

Where Did They Come From and Where Did They Go? Migration Patterns and New Jersey Housing Markets 2009 | New Jersey Association of Realtors Governmental Research Foundation

This study of New Jersey migration patterns for 2009 reaffirms that our state is continuing to lose our friends and neighbors to other states – primarily New York, Pennsylvania and Florida. Overall “New Jersey continued to suffer a net loss of households due to domestic migration”. Interestingly, households moving into New Jersey tend to be wealthier than those households  leaving the state suggesting that only those better-off can withstand the  state’s burdensome tax climate; while middle- and lower-income families are  searching for greener pastures. Click here to read the full report.

Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index | The American Legislative Exchange Council

The American Legislative Exchange Council (ALEC) has released the seventh edition of Rich States, Poor States, authored by economists Arthur B. Laffer, Stephen Moore, and Jonathan Williams.

This work provides the 2012 ALEC-Laffer State Economic Competitiveness rankings of the states based on their economic policies, which ranks states based on their Economic Performance and their Economic Outlook.

“The first, the Economic Performance Rank, is a backward-looking measure based on a state’s performance on three important variables: Personal Income Per Capita, Absolute Domestic Migration, and Non-farm Payroll Employment—each highly  influenced by state policy. This ranking details states’ individual performances over the past 10 years based on this economic data.”

“The second measure, the Economic Outlook Rank, is a forecast based on a state’s current standing in 15 policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less—especially on income transfer programs—and states that tax less—particularly on productive activities such as working or investing—experience higher growth rates than states that tax and spend more.”

According to ALEC’s rankings, New Jersey was 48th in Economic Performance (no change from last year) and 45th in Economic Outlook (down from 39th last year).

To see the full report click here. To see the NJ summary click here.

New Jersey’s Long Road Ahead: Taxpayers vs. Politicians and Unions

F. Vincent Vernuccio of the Competitive Enterprise Institute and Kevin Moonedy  of the Pelican Institute for Public Policy worked with AFP Foundation to issue  this report on the influence of unions on New Jersey’s politics and economy. New Jersey’s Long Road Ahead Vincent Vernuccio and Kevin Mooney

The Cost and Economic Impact of New Jersey’s Offshore Wind Initiative (2011) | Beacon Hill Institute – Suffolk University

In 2010, New Jersey  passed the Offshore Wind  Economic Development Act. This act “require[s] that a percentage of  electricity sold in the State be from offshore wind energy” and will be financed  through $100M in taxpayer subsidies. But is this a good deal for ratepayers?  Americans for prosperity commissioned the Beacon Hill Institute to find out – and the results are devastating. Among the findings of Beacon Hill’s cost  analyses: The project will likely result in a net cost of $3.245 billion to the  state, electricity prices are likely to rise 2.1 percent by 2017, and an average  of 2,219 jobs will be lost.

CLICK HERE to read the full report from the Beacon Hill Institute | CLICK HERE to read the Quick Findings from the Beacon Hill Institute report

Migration of Wealth in New Jersey and the Impact on Wealth and Philanthropy | Boston College Center on Wealth and Philanthropy

Boston College’s  Center on Wealth and Philanthropy recently released a study showing that from  2004 through 2008, $70 billion in wealth left New Jersey, while the state’s  charitable capacity declined by $1.13 billion.

The study was commissioned by the Community Foundation of New Jersey and the  Enterprise Trust at the New Jersey State Chamber of Commerce and looked at New  Jersey’s household wealth migration over the past decade, from 1999 through  2008.  The study focused on wealth as opposed to income because wealthy  households are the most charitable segment of our communities.

Wealth began to leave New Jersey around the time when a series of changes to  the state’s tax structure made it less competitive for charitable families  compared to neighboring states.  New Jersey’s state income taxes have risen to  levels above New York, Pennsylvania and Connecticut, and there is not a  deduction on state income taxes for charitable giving. Click here to read the full report.

Applying the Lessons of State Health Reform | National Center for Policy Analysis

Why are health insurance premiums so high in New Jersey?  One rea­son  is that state regulations require insurers to sell policies to  all appli­cants,  including people who wait until they become sick to buy  coverage (so-called  guaranteed issue). Another reason is that the state keeps  insur­ers from  adjusting their premiums to reflect the health risks of  individual consumers  (called community rating). As a result, the young and  healthy are charged more  for insurance than they would be otherwise in order to  subsidize the premiums  of others. Click  here to read full report

Insitutions Matter: Can New Jersey Reverse Course? | Mercatus Center

The government of New Jersey has resorted to fiscal  evasion—avoiding the  rules meant to constrain spending and has sustained  spending growth through  fiscal illusion, obscuring the full costs of policies  by relying on  intergovernmental aid and debt to achieve the current level of  spending. The  state has long emphasized current spending at the expense of  higher taxes for  future taxpayers. The costs of this approach are now coming  due. Click here for full report.

Dollars and Sense: Understanding the New Jersey Supreme Court’s Role in Education and Housing | Federalist Society

The State of New Jersey has experienced increasing economic difficulties in recent years. Its state and local tax burden is the highest in the nation, totaling 11.8% of the average taxpayer’s income, and the Tax Foundation ranked New Jersey’s business tax climate as the most inhospitable in the nation in 2009. The state’s economic growth in terms of real GDP has stagnated.

Deteriorating economic  conditions in the state may have caused New Jersey to begin losing two of its most important assets: its businesses and its residents. According to a Rutgers University study, between 2002 and 2006, the state lost 231,565 people. This decrease in population resulted in a cumulative income loss of $7.9 billion between 2000 and 2005. According to other surveys, only ten percent of New Jerseyans were satisfied with the way their state and local governments operated in 2008, and forty-nine percent of residents expressed a desire to leave the state in 2007. Twenty-eight percent of residents wishing to move cited high property taxes as their most pressing concern. Click here to read full report.

Analysis of the Cost of Federal Health Care Legislation | Analysis by Arizona Joint Legislative Budget Committee

The new federal health care legislation undermines state authority with respect to SCHIP (FamilyCare in New Jersey). The mandates in the bill force states to keep the  program and bear the enormous costs. If states attempt to curtail the program,  it will result in the loss of all federally-provided Enhanced FMAP (matching) funds.

States like Arizona, which had planned to eliminate its KidsCare program in order to help address a $2.6B budget deficit, will now be forced to keep the program. The Arizona Joint Legislative Budget Committee estimates that the federal mandate will cost the state close to $7.5B  through FY 2020 (relative to the state’s recently passed FY 2011 budget).

States like New Jersey, which are facing serious budgetary crises, will now be forced to commit billions of dollars to their SCHIP programs. The federal legislation effectively shatters the concept of state-controlled Medicaid and SCHIP programs.

Click here to read the memorandum from Arizona Governor Brewer. | Click here to read the analysis from the Arizona Joint Legislative Budget Committee

Gross Receipts Taxes in State Government Finances: A Review of Their  History and Performance | Tax Foundation

This working paper from the Tax Foundation explains why the gross receipts tax is a poor option for states. This stealth tax is unfair to low-margin firms, doesn’t raise enough revenue to pay the costs of government, is higher than the stated rate and makes it more difficult to compete with other states. Click here to read this report.

An Economic Analysis of New Jersey’s Real Estate Transfer Fee | Rutgers Economic Advisory Service Center for Urban Policy Research

This report by the Rutgers Economic Advisory Service Center for Urban Policy Research shows the negative effects of the estate tax on the New Jersey housing  market.

The real estate transfer fee was originally intended to cover costs associated with recording the selling price of real property. Since then the transfer fee has been increased four times while become much more progressive and complicated. Revenues generated from the fee have also been applied for other purposes than originally intended.

Most importantly, the report demonstrates how the transfer fee has increased the overall price of a home while also driving down the overall number of transactions.

An Economic Analysis of New Jersey’s Real Estate Transfer Fee

A Review of the Potential 2011 Electorate and Their Views on the State Supreme Court and Their Decisions. | Neighborhood Research Corporation

For the past four decades, the New Jersey Supreme Court has been a driving force behind the state’s economic decline and soaring tax burden. Time and again, the Supreme Court has overstepped its constitutional authority and made law from the bench – whether through its countless Abbott decisions, which usurped the power of the state Legislature to appropriate school dollars, or through its Mount Laurel decisions, which mandate that taxpayer-funded, high density, low income housing be built in every New Jersey town.

Our sister organization, Americans for Prosperity Foundation, launched a “Courts Gone Wild” program to in 2011 to educate citizens about the destructive role the Supreme Court has had in New Jersey’s decline. In advance of this effort, AFP Foundation commissioned Neighborhood Research to conduct extensive public opinion research on the Supreme Court and its decisions. Click here to see the presentation of results from this eye-opening research study.

New Jersey Taxpayers’ Budget FY 2011 | Americans for Prosperity-New Jersey

The AFP Taxpayers’ Budget lays  the groundwork for fixing our state. Our budget comes in $2.4 billion less than  the Governor’s, maintains state aid to reduce property taxes and includes the kinds of tax cuts and downsizing of government needed to make New Jersey competitive again. The Taxpayer’s Budget begins to address our inequitable school funding system and streamlines government by consolidating departments and eliminating programs that do not work. And our Taxpayers’ Budget provides real stimulus to our economy by cutting taxes on business. Click here to read AFP’s Taxpayers’ Budget.

Personal Social Security Accounts – The Chilean Model | Investors Business Daily

Thirty years ago, the country of Chile scrapped the payroll tax and established personal  Social Security accounts. The result? The Chilean Model has been an unbridled  success. 95% of Chileans opted to establish a private account on the promise of a 4% rate of return. The average rate of return has actually exceed 9% and Chile has zero pension debt. Click here to read about the success of the Chilean Model.

Seven Reasons Why Congress Should Repeal, Not Fix, the Death Tax | The Heritage Foundation

The Death Tax (or Estate Tax) represents one of the more unjust taxes levied on Americans. After having worked hard and saved your entire life, the wealth you have created is taxed as it is passed on to your next of kin.

But not only is the Death Tax morally unjust to hard-working Americans. As this report from The Heritage Foundation explains, the Death Tax is a destroyer of wealth because it by discourages savings and investment, suppresses productivity and growth, and hurts African-American and women business owners. Click here to read the report.

The Heritage Foundation 2014 Index of Exonomic Freedom

Since 2009, America has descended on The Heritage Foundation’s Index of Economic  Freedom. After ranking as the 10th freest nation in the world for two straight years, Heritage’s 2014 index places the U.S. lower than ever–12th on the list.  The U.S. dropped out of the elite ”free” level in 2010 and remains firmly ensconced in the Index’s second tier of  “mostly free” nations.

The Index defines “economic freedom” as the fundamental right of every human to control his or her own labor and property.” Societies that are economically free have “governments [that] allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.”

The Index of Economic Freedom “measure[s] ten components of economic freedom,  assigning a grade in each using a scale from 0 to 100, where 100 represents the  maximum freedom. The ten component scores are then averaged to give an overall  economic freedom score for each country.”

Read more about United States Economy.
See more from the 2014 Index.

Additional Resources

The Heritage Foundation http://www.heritage.org/

“Founded in 1973, The Heritage Foundation is a research and educational institution—a think tank—whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

We believe the principles and ideas of the American Founding are worth conserving and renewing. As policy entrepreneurs, we believe the most effective solutions are consistent with those ideas and principles. Our vision is to build an America where freedom, opportunity, prosperity, and civil society flourish.”

The Mercatus Center at George Mason University http://mercatus.org/

“The Mercatus Center at George Mason University is the world’s premier university source for market-oriented ideas—bridging the gap between academic ideas and real-world problems.

A university-based research center, the Mercatus Center advances knowledge about how markets work to improve people’s lives by training graduate students, conducting research, and applying economics to offer solutions to society’s most pressing problems.

Our mission is to generate knowledge and understanding of the institutions that affect the freedom to prosper, and to find sustainable solutions that overcome the barriers preventing individuals from living free, prosperous, and peaceful lives.

Founded in 1980, the Mercatus Center is located on George Mason University’s Arlington campus.”

CATO Institute http://www.cato.org/

The mission of the Cato Institute is to increase the understanding of public policies based on the principles of limited government, free markets, individual liberty, and peace. The Institute will use the most effective means to originate, advocate,   promote, and disseminate applicable policy proposals that create free, open, and civil societies in the United States and throughout the world.

Manhattan Institute http://www.manhattan-institute.org/

For over 30 years, the Manhattan Institute has been an important force in shaping American political culture and developing ideas that foster economic choice and individual responsibility. We have supported and publicized research on our era’s most challenging public policy issues: taxes, health care, energy, the legal system, policing, crime, homeland security, urban life, education, race, culture, and many others. Our work has won new respect for market-oriented policies and helped make reform a reality.