here is the link and a story to prove exactly what i am talking about
http://query.nytimes.com/gst/fullpage.html?res=9505E0DB1430F933A25754C0A9649C8B63
Tax Increase Leads to Plan For Layoffs By Federated
By DAVID KOCIENIEWSKI
Published: July 10, 2002
Stung by the business-tax increase that New Jersey adopted last week, the corporate parent of Macy's and Bloomingdale's department stores announced today that it planned to scale back its operations in the state and lay off at least 50 workers.
The parent company, Federated Department Stores, which employs 10,000 people in New Jersey, said it would also cancel some expansion plans and consider closing some of its 37 New Jersey stores because the state's new business tax code would raise its state taxes to $10 million from $4.4 million.
In a letter to Gov. James E. McGreevey, who signed the code into law last week, company officials said the actions were spurred by the tax increase, which had transformed New Jersey from ''one of the most desirable states in which we do business to one of the least.''
''This will necessarily result in some very painful decisions that will impact people living and working in your state,'' said the letter, signed by James M. Zimmerman, Federated's chief executive.
Some business leaders said they feared that today's announcement would be the first in a wave of corporate cutbacks caused by the tax. But the McGreevey administration, which helped close its projected budget gap by enacting a $1 billion increase in corporate taxes, responded almost aggressively to the news.
Some administration officials said Federated executives were upset because the state had denied the company's request to transfer some of their New Jersey profits to a bankrupt subsidiary, precisely the kind of loophole that the new tax code was intended to close.
State Treasurer John E. McCormac wrote a letter to the company saying that he could review Federated's tax status only if the company released a wide array of financial data, including its tax returns and the salaries and bonuses for top company executives.
''The corporate business tax changes that were implemented were fair and equitable and were fiscally responsible,'' Mr. McCormac wrote.
Federated officials scoffed at the notion that their move was related to the failed lobbying effort, and said that the requests for internal corporate documents were irrelevant.
''They can try to camouflage it any way they want,'' said Carol Sanger, a vice president for operations at Federated. ''Politicians are good at that. The bottom line is they doubled the taxes.''
The testy exchange between the company and the McGreevey administration came after business leaders had campaigned for months against the new tax plan.
The governor said the changes were necessary because an array of tax loopholes had brought a steep drop in business-tax collections in the state and allowed 30 of the top 50 employers in the company to pay the minimum corporate tax of $200.
Business advocates said Mr. McGreevey's remedy went beyond merely closing loopholes, and would lead to such painful increases in tax bills that it would cost jobs.
During negotiations with business leaders and Republican legislators this spring, the McGreevey administration made some adjustments to the new tax code. But the governor and his staff insisted that the loopholes allowed corporations to evade paying taxes and unfairly shifted the burden to middle-class families.
The administration also maintained that state taxes were such a small part of most corporations' total costs that they were only a minor factor in decisions about whether to relocate.
James C. Morford, president of the New Jersey Food Council, said his organization had lobbied against the bill because it feared that higher taxes would slow an already sluggish economy.
''In all candor, we did warn the so-called experts that these kinds of decisions might be made,'' Mr. Morford said. ''This is not an indication that a business is going to up and leave New Jersey. We knew that all along. But we feared that there would be investment decisions and resource deployment decisions based on what happened and it would hurt our state.''
The letter from Federated urged the state to repeal the law, saying that the tax increase was so large that the company would be forced to shift operations to states with less onerous taxes. In addition to the 50 layoffs in a New Jersey distribution system, Federated said it expected an unspecified number of store closings in the coming months.
