This is the headline that will appear if you enact A. 2501 of the Governor’s budget. The Governor’s budget will encourage businesses to look elsewhere when deciding where to locate their businesses and is based upon the erroneous proposition that the CBT has grown too slowly.

The Governor looks at the CBT and ponders why it is growing so slowly. It should not be surprising. Just ten years ago, there was no such thing as Limited Liability Companies and New Jersey S Corporations that provide businesses with single-level direct personal taxation of their business profits. Today, these benefits exist and have been an astounding success.

How do we know of the astounding success? Just look at the growth of the personal income tax. In spite of Whitman’s tax cuts of up to 30%, the revenues of the personal income tax have risen 92.5% during the nine-year period from FY’92 to FY’01 while the inflation rate has grown only 27.0%. During that time period, in spite of the Governor’s impressions, the CBT collections increased 52.6% - nearly double the rate of inflation.

Today, the Governor attempts to plug a $1 billion deficit by doubling taxes raised from business.