PEMBERTON – The executive vice president of the Chamber of Commerce Southern New Jersey urged the Senate Budget Appropriations Committee on Wednesday morning to support the governor’s proposed budget, including the 10 percent income tax cut, calling the budget “good for business.”
Republicans and Democrats have sparred over which tax cut proposal to implement – a 10 percent across-the-board income tax cut proposed by Christie, or a 10 percent property tax cut proposed by Senate President Stephen Sweeney (D-3), West Deptford.
Kathleen Davis, the executive vice president and chief operating officer of the Chamber of Commerce Southern Jersey, supported the income tax cut, which she said “will bring additional tax relief to small business.”
“New Jersey has more than 788,000 small businesses that employ 3.6 million workers,” Davis told the Senate Budget Committee. “A ten percent across the board cut will return $700 million annually to these businesses, which they can invest in the economy by purchasing more goods or services, hiring more employees, or purchasing equipment.”
Davis said 51.4 percent of the chamber’s members, when surveyed, said they believe the business climate in New Jersey had improved during 2011, compared to 40.3 percent in 2010.
The governor’s budget proposal relies on a rosy economic future that critics have said may be overly optimistic.
The budget proposal “nearly doubles business tax incentives from $184 million to $347 million,” according to Davis’ testimony.
Raymond Castro of New Jersey Policy Perspective also spoke about the proposed tax cuts, asking the Legislature to fully restore the Earned Income Tax Credit this year.
The EITC is a tax credit that applies to low- to moderate-income working families and individuals. The state EITC was permanently cut back by 25 percent beginning last year, Castro said, but would be partially restored in 2014.
“However, under the governor’s proposal, the cutback would not be restored until 2014 and even at that late date only half of the cuts in the state EITC would be restored, following by the other half in 2015,” Castro said.
Castro said that the proposed ten percent income tax cut would “disproportionately benefit the wealthy,” if it is implemented as proposed, one year before the cost of the restoration of the EITC cut in 2014.
“However, unlike the wealthy, these low-income families need this break now when unemployment remains at record levels, not later when the economy has improved,” Castro said. He also said that Sweeney’s plan would also not result in any net tax relief for low-income families unless the EITC is fully restored.
Castro called on the Legislature to fully restore the EITC and NJ FamilyCare cutbacks this year.