July 21, 2018 | ° F

Sales tax on services bad for NJ economy

Independent gubernatorial candidate Chris Daggett's belief that imposing a sales tax upon services can automatically facilitate the reduction of property taxes is fundamentally flawed as it incorrectly assumes that consumers will continue to spend on those services at the same rate after these sales tax increases are implemented.

Imposing a sales tax on services would ultimately result in consumers spending less on these services in New Jersey thereby increasing the probability that New Jersey consumers will either stray to neighboring states to pay for these services or will simply not utilize these services at the same frequency.

Either way, Daggett's plan would increase the probability that a large number of New Jersey's service-oriented jobs will be lost and that fewer entrepreneurs will be willing to start up service-oriented businesses in New Jersey.

This could lead to decreased income tax and business tax revenue for the state thereby resulting in property taxes having to be further increased, as the state would have to find a way to compensate for this lost revenue.

Nels Lauritzen is a Livingston College alumnus from the class of 1998. 

Nels Lauritzen

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