Posted on 07/09/2002 9:28:02 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
TRENTON, N.J. (AP) — The corporate parent of Macy's and Bloomingdale's said it will cut jobs and possibly close stores, blaming a new tax that more than doubles what the chain pays to the state.
Federated Department Stores Inc. will also curtail hiring and end plans to remodel or expand existing stores, the company chairman said Tuesday. The announcement is the first such complaint since the law was approved last week.
The retail chain claims it paid $4.4 million in state corporate taxes last year.
Now, thanks to a law Gov. James E. McGreevey needed to balance the state budget, Federated says it will pay $10 million.
``I can tell you unequivocally that we cannot and will not absorb a $5.7 million New Jersey tax increase without taking commensurate measures to reduce expenditures there,'' Federated Chairman James M. Zimmerman wrote McGreevey.
The measures include plans to cut up to 60 union jobs at a distribution center, Zimmerman said. He said the company is also reviewing operations at all of its New Jersey locations.
``From this, we anticipate there will be store closings,'' Zimmerman said.
State Treasurer John E. McCormac fired back a letter demanding Federated release detailed financial records, including all net profits and salaries for top executives.
Federated should also disclose its revenues and net profits from several of the old regulations, including one that allowed New Jersey businesses to transfer profits to states that don't charge corporate taxes, McCormac said.
``The corporate business tax changes that we implemented were fair and equitable and were fiscally responsible. All actions were discussed in public forums over the last several months and were done in consultation with many members of the business community,'' McCormac wrote.
The business tax is expected to bring in at least $1.8 billion, $1 billion more than the state collected in corporate revenues last year.
McGreevey said the new tax and the other budget bills were needed to address a possible $6.1 billion deficit.
Business leaders who campaigned against it insisted McGreevey's plan would hurt companies and drive jobs and corporations out of New Jersey.
McGreevey said the tax would close loopholes that let 30 of the top 50 employers in the state pay just $200 a year in taxes.
In New Jersey, Federated operates 32 Macy's stores and five Bloomingdale's as well as operations and distribution offices. It has 10,000 employees in the state.
Business groups said Federated's announcement will likely be the first of many such complaints.
``We have heard from many businesses that were looking at what expenses they would cut to be able to make their tax payment,'' said Art Maurice, vice president of the New Jersey Business and Industry Association. ``It's distressing but not surprising.''
Makes sense to me. (If I was drunk)
I say this because it appears (at least right now) that none of their competitors have responded to the higher corporate tax in a similar manner.
People in New Jersey who pay relatively low state income and gasoline taxes think they've got it great compared to their counterparts across the river in New York, but when you add up all the taxes that are paid to different levels of government you'll find that the overall tax burden is almost identical.
This place is simply going broke, and there is nothing that McGreevey or anyone else is going to do about it as long as the people who live here maintain their Third World view of government.
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