A Step Towards Fairness: New Jersey’s Corporate Tax Proposal
As Tax Day approaches, the conversation about fair taxation is intensifying. A striking consensus among American taxpayers suggests that over 90% believe in the obligation to pay their fair share of taxes. However, this sentiment is not echoed by some of the largest corporations in the country. Notably, companies such as Nike and FedEx have been criticized for contributing less in taxes despite their substantial profits.
New Jersey is addressing this disparity head-on with Governor Murphy’s recent proposal. The plan aims to reverse a corporate tax cut for businesses with annual profits exceeding $10 million. The proposed Corporate Transit Fee would direct funds to support the state’s public transit system, which is crucial for the daily operations of these very corporations.
Contrary to the narrative pushed by the big business lobby, many corporations enjoy tax rates lower than those of average households. In New Jersey, while individuals face a federal tax rate of over 16%, corporations like AT&T, Bank of America, and Citigroup have paid significantly less over the past five years. Some corporations, including Amazon and ExxonMobil, have even reported zero tax liability in certain years by leveraging losses and complex tax avoidance strategies.
The disparity in tax contributions has only grown wider with aggressive tax avoidance tactics and policies enacted during the Trump administration that favored the wealthy. As a result, public infrastructure, such as New Jersey Transit, has suffered from underfunding while corporate profits soar.
Public opinion in New Jersey reflects a clear stance against low corporate tax rates, with a majority opposing the recent expiration of a Corporate Business Tax surcharge intended to support NJ Transit. This sentiment is in line with national attitudes; a Pew Research poll in 2023 revealed widespread frustration over corporations and wealthy individuals not paying their fair share.
While the Corporate Transit Fee is a step in the right direction, it does not fully address the issue of tax avoidance. To truly hold corporations accountable, states must challenge long-standing tax avoidance practices and reinvest in essential services like education, health care, and public transportation.
Corporations may lack patriotic pride or civic duty, but states have the power to enforce fair taxation. As New Jersey legislators consider reinstating the full corporate surtax and closing tax loopholes, the message is clear: it’s time for profitable corporations to contribute justly to the communities they serve.
