Hertz move will mean big take-home pay boost to workers
The entity owning the most cars in the United States just gave nearly one thousand of its employees a big boost in take-home pay, and a big reduction in their cost of living expenses. Hertz, the largest general use car rental brand, has announced that it will move its corporate headquarters from Park Ridge, New Jersey to Estero, Florida. The company also will move the headquarters of its most recent acquisition, Dollar Thrifty, from Oklahoma to Florida.
The state of Florida has no personal state income tax. New Jersey has a progressive income tax that tops out at 8.97%. A rough estimate of the personal income tax saved by a family earning about $1000,000 living in Florida compared to New Jersey is about $4,000.00. Working class blue and white collar workers at Hertz who relocate will all see their take-home pay increase. However, top executives at Hertz could see dramatic real dollar increases in their pay. A top executive earning $400,000.00 might see her family’s take home earnings rise by as much as $28,000.00 per year due to the reduction in taxable income in Florida compared to New Jersey. Oklahoma also has a personal income tax that tops out at 5.25%, which puts it approximately in the middle of the US states that have an income tax. According to a 2007 census bureau analysis Florida is among the lowest overall taxed states in America and New Jersey among the highest*.
On additional benefit of raising one’s family in Florida is the excellent educational system. According to its website, the University of Florida’s in-state tuition is $6,690.00. Total student costs including housing for in-state residents is $20,640.00. For comparison, out of state residents pay $38,034.00. It won’t be hard for newly relocated residents to pay for UF college educations for their kids with the savings from the income tax. “Go Gators” indeed.
In a press statement Hertz says that overall about 700 jobs will be relocated to Florida. The company did not mention how many of the jobs would see a cost of living adjustment, but generally speaking, companies do not lower the salaries of existing employees when they move them. In many cases economic assistance in the form of moving expenses is provided to employees to make the move more manageable.