Fact Check: New Jersey has higher taxes relative to other US states

New Jersey's Tax Burden: An In-Depth Examination

Introduction

The claim that "New Jersey has higher taxes relative to other US states" is a common assertion in discussions about state tax policies. This claim often arises in the context of comparing state income tax rates, sales taxes, and overall tax burdens. To evaluate this assertion, we will examine various sources that provide data on New Jersey's tax rates and how they compare to those of other states.

What We Know

1. Income Tax Rates: New Jersey has a graduated income tax system with rates ranging from 1.4% to 10.75%, depending on income level and filing status 510. This places New Jersey among the states with the highest marginal tax rates in the nation, alongside California, Hawaii, and New York 47.

2. Sales Tax Rates: The state sales tax rate in New Jersey is 6.625% 8. This is relatively moderate compared to some states with higher sales tax rates, such as California, which has a base rate of 7.25% but can reach over 10% when local taxes are included.

3. Overall Tax Burden: According to WalletHub, New Jersey ranks among the states with the highest overall tax burden, which includes income, sales, and property taxes 6. However, the specific ranking can vary depending on the methodology used to calculate the tax burden.

4. Property Taxes: New Jersey is known for having some of the highest property tax rates in the country, with an average effective property tax rate of approximately 2.21% 6. This is a significant factor contributing to the state's overall tax burden.

5. Comparison with Other States: States like Texas and Florida have no state income tax, which significantly lowers their overall tax burden compared to New Jersey 6. In contrast, states with high income taxes often have lower property taxes or different tax structures that can affect overall tax liability.

Analysis

The claim that New Jersey has higher taxes relative to other states is supported by several credible sources, but the context and methodology behind these claims warrant scrutiny.

• Source Reliability: The Tax Foundation is a reputable organization that provides comprehensive data on state tax rates 110. However, it is essential to note that their analyses can sometimes reflect a conservative bias, as they advocate for lower taxes and less government intervention. This potential bias should be considered when interpreting their findings.

• Comparative Analysis: While New Jersey's income tax rates are among the highest, it is crucial to compare these rates with the overall tax burden, which includes property and sales taxes. For example, while New Jersey's income tax rate is high, states like California also have high property taxes, which can complicate direct comparisons 46.

• Methodology Concerns: Different studies may use varying methodologies to assess tax burdens. For instance, WalletHub's rankings consider multiple factors, including income, sales, and property taxes, while other sources may focus solely on income tax rates 6. Understanding these methodologies is crucial for accurately interpreting the data.

• Conflicts of Interest: Some sources, such as H&R Block, provide tax information that may be influenced by their business interests in promoting tax preparation services. This could introduce bias in how they present tax information 5.

What Additional Information Would Be Helpful?

To further evaluate the claim regarding New Jersey's tax burden, additional information could include:

• Detailed comparisons of tax burdens across a broader range of states, including those with similar economic profiles.
• Analysis of how tax revenues are utilized in New Jersey compared to other states, which could provide context for the high tax rates.
• Longitudinal studies that track changes in tax rates and their impacts on population migration and economic growth.

Conclusion

Verdict: True

The assertion that New Jersey has higher taxes relative to other US states is substantiated by multiple sources indicating that the state has some of the highest income and property tax rates in the nation. Key evidence includes New Jersey's income tax rates, which reach up to 10.75%, and its average effective property tax rate of approximately 2.21%, both of which contribute significantly to the state's overall tax burden.

However, it is important to note that comparisons can vary based on the methodologies used in different studies, and some sources may exhibit biases that could influence their findings. Additionally, while New Jersey's sales tax rate is moderate, the overall tax burden is still high when considering all forms of taxation.

Readers should be aware of these nuances and the limitations of the available evidence, as tax burdens can be influenced by various factors, including state-specific economic conditions and tax structures. As always, it is advisable for individuals to critically evaluate information and consider multiple perspectives when assessing claims about tax policies.

Sources

1. State Individual Income Tax Rates and Brackets, 2025. Tax Foundation. Link
2. State Individual Income Tax Rates and Brackets, 2023. Tax Foundation. Link
3. New Jersey Tax Tables 2023 - iCalculator™ NJ (US). Link
4. 2024 and 2025 State Income Tax Rates and How They Work. NerdWallet. Link
5. New Jersey state tax: Rates and other income tax information. H&R Block. Link
6. Tax Burden by State in 2025. WalletHub. Link
7. Income Tax by State: Which has the Highest and Lowest Taxes. TurboTax. Link
8. 2025 State Sales Tax Rates & Calculator by State. Avalara. Link
9. New Jersey Income Tax Calculator 2024-2025. Forbes. Link
10. New Jersey Tax Rates & Rankings - Tax Foundation. Link