‘Pay Your Fair Share’: Activists Rally For Higher NJ Corporate Tax

NEWARK, NJ — A long-running tug of war over a proposal to increase taxes for the wealthiest corporations in New Jersey continued this week when activists held a protest outside a state budget hearing in Essex County. However, critics of the plan argue that businesses in the Garden State are taxed hard enough as it is – and they don’t deserve to be punished for their success.

On Tuesday, a coalition of labor leaders, students and community activists gathered for a rally on the campus of the New Jersey Institute of Technology (NJIT) in Newark, where the Senate Budget and Appropriations Committee was holding its first public budget hearing for the 2025 fiscal year (watch a video of the protest here).

Their plea to lawmakers? Make large corporations pay their “fair share” of taxes to New Jersey.

Activists have been pushing for a restoration of the state’s corporate business tax (CBT), which sunset earlier this year after seeing multiple extensions. New Jersey has a 9 percent tax on corporations – one of the highest in the nation – with companies earning less than $1 million taxed on a sliding scale.

The state previously charged an extra 2.5 percent “surtax” for companies that top $1 million in earnings. On Jan. 1, the surtax expired as originally planned. However, several advocacy groups in New Jersey have been calling for the state to revive the controversial tax, arguing that it could be used to bridge a huge, looming funding gap at NJ Transit – and keep more money in riders’ pockets.

• See Related: Debate On Corporate Tax Reignites As NJ Transit Hikes Bus, Train Fares

It now looks like lawmakers are leaning towards bringing back the CBT surcharge – in a slightly watered-down form.

During his 2024 budget address, Gov. Phil Murphy announced that state officials are proposing the creation of a “new” 2.5 percent tax on businesses raking in more than $10 million per year. It would create a “dedicated funding source” for the cash-strapped NJ Transit, which is proposing a 15 percent fare hike for commuters to cover a sprawling shortfall.

• See Related: NJ Transit Plans To Raise Fares 15% For Train, Bus Riders

What would a fare hike of this magnitude mean for train and bus riders? Just ask Elodia Perez, a 75-year-old commuter from Passaic.

“Our communities and families are already struggling to keep up with rising costs,” said Perez, a member of Make the Road New Jersey. “And with NJ Transit’s proposed 15 percent bus and train fare increase, tens of thousands of riders like me will have to make additional sacrifices, while corporations get a massive tax cut.”

According to Perez, the current proposal will help keep the wolves from the door – but it doesn’t go nearly far enough.

“Although Governor Murphy announced a tax on corporate profits over $10 million, a result of the collective efforts of working-class commuters, this is not enough,” Perez insisted. “Bus fares are still going up and discounted FLEXPASS tickets, a huge help for elderly riders like myself, will still be cut.”

It’s a point that advocates like those in the For The Many NJ coalition – which spearheaded Tuesday’s rally in Newark – have been hammering on over the past year.

“By exempting corporations with annual profits between $1 million and $10 million, the governor’s current framework for a Corporate Transit Fee leaves more than $200 million on the table that New Jersey can't afford,” the group said.

According to Nicole Rodriguez, president of New Jersey Policy Perspective, it isn’t only NJ Transit that needs more funding – there is also the possibility of looming cuts to critical programs like community colleges and legal services.

“A state budget that advances racial equity must ensure that big corporations pay for public transit and infrastructure they profit from,” she said.

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The plan to raise taxes on wealthy corporations also has its critics, who say it’s a bad deal not just for businesses, but also for the workers they employ.

The New Jersey Business and Industry Association (NJBIA) – which has been among the most ardent opponents of restoring the CBT surcharge – has accused the Murphy administration of holding successful business owners’ feet to the fire to cover up its own budget woes.

“That Gov. Murphy would re-commit to a new business tax at a time of a multi-billion-dollar surplus to fund NJ Transit when there is no correlation between those impacted corps and public transportation – which he acknowledges himself – is nothing short of a punitive action against our largest job providers,” NJBIA president and CEO Michele Siekerka said.

“It is a punishment they do not deserve,” Siekerka emphasized.

Recently, the group questioned the accuracy of a poll from Monmouth University that said there appears to be lukewarm support for Murphy’s latest proposal. Pollsters wrote:

“Four in 10 (40%) New Jerseyans approve of this tax proposal, 28% disapprove of it, and 32% are unsure about it. Most Democrats (68%) support this plan while half (50%) of Republicans oppose it. Among transit users, 44% of regular riders and 45% of occasional riders approve of this proposal, while only 32% of non-riders agree. There is not overwhelming confidence that such a fund would achieve its aims. Only 4 in 10 state residents are confident this dedicated fund will lead to significant improvements at New Jersey Transit – with just 6% very confident and 35% somewhat confident. Another 26% of the public are not too confident about the outcome of this policy and 30% are not at all confident.”

“The Monmouth University Polling Institute typically does very fine work that we appreciate,” the NJBIA responded. “But with great respect, it would have been nice to provide some additional context in its question about the proposed Corporate Transit Fee that noted it would be an additional surtax on businesses – one which would give them the highest corporate tax rate in the nation, by far.”

“Even the context that New Jersey’s largest corporations are already paying the fourth-high top CBT rate in the nation would have been welcome and appropriate in the question,” the NJBIA suggested.

Meanwhile, the Roseland-based New Jersey Society of Certified Public Accountants (NJCPA) carried out its own poll among its 13,000 members, which showed strong opposition to Murphy’s proposal.

According to the NJCPA:

“More than 70% of NJCPA survey respondents said the tax would prompt businesses to leave New Jersey. Instead, they said the Murphy administration should focus on shrinking government, lowering taxes of individuals and businesses, implementing zero-based budgeting and reforming the state pension system. They added that the cost structure of NJ Transit should also be fixed.”

“The proposed new corporate transit fee – coming on the heels of the sunsetting of the CBT surcharge – will cause more business executives to reconsider establishing, expanding or keeping their business in the Garden State,” executive director Aiysha Johnson said.

Despite the concerns of business advocates, groups such as the For The Many NJ coalition continue their push for higher corporate taxes in the Garden State.

“To the Walmarts, the Amazons and the Wells Fargos … it’s time to pay your fair share,” Rodriguez declared at Tuesday’s rally in Newark.

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