Tracking population trends within different states in America is fascinating and can tell a lot about what people are looking for in a home state. Factors such as cost of living, proximity to metropolitan and/or coastal areas, climate, and more all play large roles when one is making the important decision of where to live. I may be biased as a lifelong resident, but New Jersey offers many unique things – a climate with four disparate seasons, proximity to one of the greatest cities in the world, public schools of the highest quality, and more. However, many are leaving the state in droves and migrating to states like Texas, Florida, or Nevada. According to a study by United Van Lines, people are leaving New Jersey faster than any other state. This is largely in part due to the taxes imposed upon New Jersey residents, which are substantially higher than those in other parts of the nation.
As stated on each of their state government websites, Texas, Florida, and Nevada are three states that have no state income tax. From 2010-2015, their state populations increased from 7.05-9.24%. Conversely, New Jersey has an income tax of up to 8.97%, in addition to the highest median property tax in the nation. The number of people leaving New Jersey has increased in recent years, and experienced less than 2% population growth in that same time span, well below the national median.
Two taxes that more profoundly impact migration patterns of senior citizens in particular are the inheritance and estate taxes. Inheritance taxes are charged against people inheriting money and other assets, and estate taxes are charged against the estate of a resident after their death. New Jersey is one of two states in the entire nation that levies both an inheritance and estate tax – the aforementioned states have neither tax. Thus, many New Jerseyans feel that they cannot afford to retire or die in New Jersey, and they must move to other states without such high tax rates.
If the only ones left in New Jersey are those that can afford to pay the exorbitantly high taxes, this will affect what our state will look like in the future, as it impacts the planning of our municipalities as well. As the median income of an area increases, the desires of those residents in regards to the land use, amenities offered, and aesthetic preferences will be different than those of a less affluent community.
It has been calculated by the New Jersey Business and Industry Association that more than 2 million people left New Jersey from 2005 to 2014, costing the state $18 billion in net adjusted income and over $11 billion in net economic activity. If we wish to stop this outflow of economic activity, then we must lower or eliminate our inheritance and estate taxes so that we can remain competitive with other states. I understand that these taxes generate revenue that is then put into systems that make our state so appealing, but there are alternatives to these taxes that our state government should evaluate. The Garden State is one of the best states in the nation, and we should be trying to attract others and give more people the opportunity to live here, as opposed to turning them away.