Proof positive that the centuries old battle between those of us who cherish individual liberty and the liberal collectivists who work to perpetuate a culture of dependence is alive in New Jersey has been provided in a recent report from the liberal Center on Budget and Policy Priorities (CBPP).
“The Center on Budget and Policy Priorities prides itself on developing policy options to help alleviate poverty”, the group’s website says. The Center also seeks to examine “the short- and long-term impacts that proposed policies would have on the health of the economy and on the soundness of federal and state budgets.”
Unfortunately, as illustrated by a recently released report by Jason Levitis, The Impact of State Income Taxes on Low-Income Families in 2006, CBPP has let their liberal zeal for the former goal cloud their judgment on the latter.
Citing the fact that New Jersey, along with the other 18 states, levies personal income taxes on families below the “poverty level”, Levitis argues that “taxing the incomes of working-poor families runs counter to the efforts of policymakers across the political spectrum to help families work their way out of poverty.”
He continues, “Families with very limited means are still taxed too much by states€¦by eliminating state income taxes on working families with incomes at or below the poverty line, states can offset some of the child care and transportation costs that families incur as they strive to become economically self-sufficient.”
I question whether a $175 bill for state government (including so-called "property tax relief") is too high when one makes $30,000 a year and is utilizing government services. But in decrying this state of affairs, the report argues for an even more “progressive” income tax structure than we have today. But that would serve to institutionalize poverty, not alleviate it.
Throughout CBPP’s website are cries for more money for all kinds of expanded big government social programs on top of those failed programs that already exist.
If low-income families aren’t going to be contributing — even a nominal amount — to pay for these programs, who will? Once again, the burden will fall squarely on already over-taxed “rich” people earning over $100,000 a year. CBPP claims that this is only “fair.”
This group demands these low-income individuals hold a mortgage on the productivity of anyone above their bureaucrat determined income level and call this “fair” which by their lexicon translates to “from each according to their ability to each according to their needs — Karl Marx’s central premise.”
As the tax structure becomes more progressive, taxpayers become a smaller proportion of voters. This means that there is no disincentive for low-income people to push for higher taxes, while there is always an incentive to lobby for more “free” handouts and programs.
The result is an ever increasing redistribution of wealth. The most productive elements of society are penalized, taxed at higher rates while the less productive elements of society are increasingly subsidized, perpetuating a culture of learned dependence.
Heavily taxing high income people while eliminating taxes on low income people diminishes another incentive to climb out of poverty.
New Jersey’s already steep “progressive” tax structure has contributed to New Jersey’s stagnating economy and that most adversely affects low income people, who find fewer economic opportunities because of decreased business investment.
The CBPP report applauds the federal tax code, which has exempted Low Income people from income taxes since the 1980’s and indeed, on the federal level about half of households are non-payers. This fact has a dramatic effect on the response to the inevitable entitlement crisis, which many states also face.
New Jersey, for example, faces skyrocketing employee health and pension costs. Will voters who bear the costs equally decide on a best response to these issues based on a rational cost-benefit analysis? Or will the non-payers demand the tax-payers pay their “fair share” and to continue to support them through high taxes and huge deficits?
When everyone shares in the tax burden, everyone has a stake in seeing government run more efficiently and cost-effectively. Liberals like those folks at the CBPP are advocates for bigger government and higher taxes and naturally want as big a political constituency for this ideology as possible. It’s up to working families and small businessowners stuck with higher and higher tax bills to stand up against this crass political power ploy.