From Property Taxes to Corporate Rates, NJ Punishes Everyone — and It Shows in the Rankings
New Jersey ranks 49th in the 2025 State Tax Competitiveness Index, showing how taxes crush both homeowners and businesses.
Same Old Story: Jersey at the Bottom 🎯
Congratulations, New Jersey. Out of 50 states, you managed to land 49th place in the Tax Foundation’s 2025 State Tax Competitiveness Index. The only state worse than us? New York. You know it is bad when the state most people love to hate is the only one keeping you out of dead last.
Year after year, the Garden State gets hammered for the same problems: insane property taxes, sky-high income taxes, and business-unfriendly rules. Throw in so-called “relief programs” that look good on paper but barely move the needle in reality, and it is no wonder so many people are browsing Zillow listings in Florida, the Carolinas, or Pennsylvania.
For homeowners, these rankings are not abstract policy talk. They show up as the property tax bill that arrives like clockwork every quarter, the paycheck that feels lighter than it should, and the rising cost of keeping the lights on. For businesses, they show up in the form of higher operating costs, less flexibility, and the constant temptation to relocate across state lines.
Why New Jersey Ranks So Low 📉
According to the Tax Foundation, states at the bottom of the list share three fatal flaws:
1. Complex Tax Codes That Confuse Everyone 🌀
New Jersey’s tax code is infamous for being a tangled mess. Homeowners face overlapping municipal, county, and state property taxes, each with its own quirks. Business owners deal with convoluted filing rules, exemptions, and carve-outs that require armies of accountants to decode. The complexity adds cost, and those costs get passed on to families, renters, and customers.
2. High Rates Across Multiple Tax Categories 💸
It is not just one category where New Jersey piles it on. We have the highest property taxes in the nation, one of the top five individual income tax systems, and the single highest corporate income tax rate in America. Most states at least balance things out. Florida has high property taxes in some counties but no state income tax. North Carolina has a reasonable income tax but lower property taxes. New Jersey decided to turn every dial up at once and see how much residents and businesses could take before they tapped out.
3. Business Environments That Punish Investment 🚫
The Tax Foundation looks at more than homeowners. It evaluates how tax policies encourage or discourage investment. On that front, New Jersey fails miserably. An 11.5 percent corporate income tax, constantly shifting policies, and unpredictable costs make it one of the least attractive places in the nation to run a company. When businesses leave, jobs leave. When jobs leave, the tax base shrinks. When the tax base shrinks, the state raises taxes again. Rinse and repeat.
Put all three together and you have a toxic environment for both families and businesses. That is how New Jersey ends up in the bottom two year after year.
Property Taxes: The Nation’s Punchline 🏠
No one needs a national report to tell them that New Jersey’s property taxes are brutal. Ask any homeowner.
The average property tax bill in New Jersey is close to $10,000 per year.
In Bergen, Essex, and Morris counties, bills often climb into the $15,000 to $20,000 range.
For many families, property taxes cost more than their mortgage principal.
High property taxes do not just hit homeowners. They push rents higher, they discourage first-time buyers, and they push retirees on fixed incomes out of the state. The value homeowners build over decades gets eaten alive by annual bills that never stop rising.
Income Taxes: Death by a Thousand Brackets 💵
New Jersey’s individual income tax is among the highest in the country. The progressive brackets squeeze families on both ends. Middle-class earners find themselves sending big chunks of paychecks to Trenton, while higher earners are targeted with some of the steepest rates in the U.S.
Small businesses and large corporations alike get hit even harder. At 11.5 percent, New Jersey’s corporate tax rate is the highest in the nation. For entrepreneurs, that is less money to reinvest, hire, or grow. For corporations, it is one more reason to set up headquarters in Texas, Florida, or North Carolina instead of here.
Enter Governor Murphy’s 2026 Budget 💼
As if the Tax Foundation’s report was not bad enough, Governor Murphy signed off on New Jersey’s largest-ever budget this summer: a record $58.8 billion for fiscal year 2026.
On the surface, it includes $4.3 billion in property tax relief through programs like ANCHOR, Senior Freeze, and Stay NJ. Politicians will point to that number and claim victory. But the same budget also introduces new taxes that hit homeowners and businesses right where it hurts.
New Taxes and Hikes in Murphy’s Budget
Realty Transfer Fees: Sellers of higher-value homes now face new fees. Properties sold between $2 million and $2.5 million are taxed at 2 percent. Homes between $2.5 million and $3.5 million are taxed at 3 percent. Anything over $3.5 million gets hammered at 3.5 percent. Translation: if you are selling a Bergen County luxury home, the state gets a much bigger slice of the pie.
Gambling Taxes: Online gaming and sports betting revenues are now taxed at 19.75 percent, up from 15 and 13 percent. For casual gamblers, that means less incentive to play. For casinos, it means higher costs and thinner margins.
Cigarettes and Vaping: The tax on cigarettes is now $3 per pack. Vaping products get taxed at 30 cents per milliliter or 30 percent of retail. Another hit for lower-income residents who already struggle with day-to-day costs.
Relief vs. Reality
Yes, seniors can qualify for Stay NJ and get reimbursed up to 50 percent of their property taxes. But half of a monster bill is still a monster bill. A retiree paying $14,000 annually still shells out $7,000 after “relief.” Programs like ANCHOR and Senior Freeze are nice headlines, but they do nothing to solve the root problem: property taxes in New Jersey are structurally the highest in the nation.
The Jersey Tax Trap 🏦
Here is how the trap works, and why homeowners keep feeling squeezed tighter every year:
High taxes drive residents out.
A smaller tax base means less state revenue.
To make up for it, lawmakers raise taxes again.
Businesses leave. Jobs leave. More residents leave.
Repeat the cycle.
It is a hamster wheel powered by your paycheck.
How New Jersey Stacks Up Against Escape States 🌎
To understand why so many people are leaving, compare the Garden State with where they are moving:
| State | Avg. Property Taxes | State Income Tax | Corporate Tax | Key Advantage |
|---|---|---|---|---|
| New Jersey | ~$10,000 | Up to 10.75% | 11.5% | None. Just pain. |
| Florida | ~$3,400 | None | 5.5% | Sunshine, no income tax |
| North Carolina | ~$2,200 | Flat 4.5% | 2.5% | Lower overall burden |
| Pennsylvania | ~$3,000–$4,000 | Flat 3.07% | 8.99% | Affordable housing |
| Texas | ~$4,000–$5,000 | None | 6.25% | Strong business climate |
Every state has trade-offs, but compared to New Jersey, the grass really is greener almost anywhere else.
Real-World Impact on Homeowners ⚖️
These are not just numbers. They shape real lives:
Retirees: Many on fixed incomes are selling and moving because their property taxes alone cost more than their pension.
Young Families: Parents with two incomes discover they can own twice the house for half the monthly cost in the Carolinas or Florida.
Business Owners: From contractors to manufacturers, many are packing up because the math no longer works in New Jersey.
The people leaving are not doing it because they hate the shore or good bagels. They are doing it because staying no longer makes sense financially.
Why This Matters for Sellers in 2025 and 2026 🏚️
Between the Tax Foundation’s near-bottom ranking and Murphy’s latest budget, New Jersey homeowners are in a tough spot.
Buyers are cautious because they know costs are higher here.
Sellers face higher transfer fees on top of existing costs.
Relief programs offer pennies on the dollar compared to what families and retirees actually need.
Inventory is expected to rise as more owners decide to cash out and escape, which could push prices down in some towns.
If you are thinking about selling, waiting could mean more competition and less leverage.
The Breaking Point: How Much Longer Can You Take It? ⏳
Most New Jersey homeowners already know it is expensive to live here. But when the state hands out rebates with one hand and hikes fees with the other, it is hard to keep believing things will improve. The rankings are just the national confirmation of what people here feel every month.
At some point, you have to ask yourself: how much longer can you keep feeding the cycle?
Is It Time to Plan Your Escape? 🧳
New Jersey’s 49th-place finish in the 2025 Tax Competitiveness Index is not an outlier. It is the new normal. Add Murphy’s latest tax hikes, and it is clear that nothing will change anytime soon.
If you are tired of property taxes that eat your paycheck, income taxes that punish your hard work, and corporate taxes that scare off opportunity, then maybe it is time to plan your move.
👉 At Escape From New Jersey, we connect homeowners with trusted agents in Florida, the Carolinas, Pennsylvania, and beyond. Whether you want sunshine, lower taxes, or simply to keep more of your own money, we help you sell here and buy there.
Because if New Jersey keeps digging, 50th place is just around the corner.
