Friday, July 31, 2009

Job Growth Vital to NJ Economy

Unemployment in New Jersey is at its highest level in 32 years, the past 6 months of job losses have exceeded anything we've experienced and the number of long-term unemployed is at an all-time high since World War II. Once the recovery begins, many unemployed looking for jobs will realize that jobs as good as the ones they lost are almost impossible to find since layoffs in this recession are permanent and not temporary.

Taking into consideration the current 9.5 % unemployment, plus another 8% that are no longer collecting and off the statistical radar screen we are looking at 18% to 20% unemployment. I expect unemployment to reach somewhere around 11 to 12% before it stabilizes. Even when this recession is over, the amount of job losses have exceeded job creation. The road to recovery will be a long one before anyone realizes the recession is over.

Many of our residents are finding their benefits coming to an end, and left with nowhere else to turn.

Many of the unemployed will find that their previous jobs have been eliminated; new wages will not come close to prior earnings.

Since 2001, New Jersey has had a 23 percent decline in manufacturing, losing 96,200 jobs. The increased corporation business tax liability imposed in 2002, requiring a business to pay a surcharge equal to 4% of the amount of the corporation’s tax liability. Since the recession began in December 2007, New Jersey had shed 155,000 jobs. By the end of 2008, more than thirty-one corporations moved to Pennsylvania taking 21,000 jobs with them, along with $13 billion in income and wealth. Due to the increase in business tax 100,000 jobs were lost.

New Jersey needs to put an end to its stifling business practices. We need to eliminate the 4% corporate tax, rollback the 25% tax on wine and spirits, and find ways to help small business owners with affordable healthcare for their families and workers.

Since 2003 until now our legislation has put forth and implemented the payroll tax for paid family leave, the sales tax increase along with the sales tax expansion. There was the corporation business tax, increases on the realty transfer tax, casino taxes, hotel/motel bed and breakfast occupancy tax, the elimination of disallowance of depreciation deduction, elimination of deductibility of net operating expenses, taking away ability of a business to deduct from their taxes an amount for the depreciation of equipment and machinery. Also, the Corporation Business Tax and Gross Income Tax from the Federal Deduction of Qualified Production Activities Income, which increases taxes for certain New Jersey businesses by decoupling New Jersey’s Corporation Business Tax (CBT) and Gross Income Tax (GIT) from the federal manufacturer tax deduction.

The above mentioned taxes are only a few out of many penalties that have been detrimental to the decline of business in New Jersey since 2002. Is it any wonder jobs are leaving the state for greener pastures?

Revenue that would have gone to the business owners to expand and create jobs, raises, payroll, and hiring is being swallowed up by state greed to replace the fiscal mismanagement of years gone by. Trenton needs top take a step back and take a look as what must be done to reverse the trend and replace lost revenue. Raising taxes in a recession is not the answer, having an adverse affect.

Trenton must find a solution to encourage business growth, so we are in a position as the effects of the recession diminish, business growth will be able to outpace job demand. Lacking jobs, the market can only perpetuate more of the same.

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