In Fiscal Year (FY) 2011, New Jersey collected $53.1 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average New Jersey taxpayer can afford this level of taxation.
As shown in the chart, New Jersey’s state and local tax burden (tax collections divided by personal income) was the seventh highest in the nation for FY 2011 at 11.6 percent—or 10.5 percent below the national average of 10.5 percent. Not surprisingly, the tax burden has grown significantly over time by 73.8 percent to 11.6 percent in FY 2011 from 6.7 percent in FY 1950.
New Jersey’s high tax burden is driven by the highest-in-the-nation property tax burden at 5.5 percent which is 60.4 percent above the national average (3.5 percent). New Jersey also has a higher-than-average individual income tax burden (2.3 percent, 22nd highest) and corporate income tax burden (0.5 percent, 10th highest).
J. Scott Moody has over 18 years as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.