May 12, 2008
NJ's return on US taxes remains low, By Raju Chebium
It's long been a fact of political life in New Jersey: The state pays more in federal taxes than it gets back in federal spending. But expect it to become a campaign issue this year, as it frequently does.
For every federal tax dollar New Jersey sends Washington, the state has been getting back between 57 and 72 cents each year dating back to 1981, according to the Tax Foundation, a watchdog group in the nation's capital.
That makes New Jersey a perpetual "donor" state because it gets a negative rate of return on the federal taxes it pays.
States such as New Mexico and Mississippi, which are poorer than New Jersey, are top "recipient" states because they typically get back more—twice as much—than what they send to Washington by way of individual, employment and corporate taxes, in addition to other levies that include tobacco and estate taxes.
Analysts don't expect New Jersey's low or dead-last ranking to improve anytime soon for a mix of reasons, not all of them bad. But it is an issue bound to resonate among Garden State voters, who pay more in taxes than their counterparts almost anywhere and want their congressional candidates to lighten their tax load. [Read the full article.]