Assume the following: you’re "rich"; you drag down (say) $2 million per annum. Not quite Corzine numbers, but you’re doing very well, thank you very much. Now, you’re considering relocating, and your choice comes down to an estate in Hunterdon County, or a comparable spread in Bucks.
So, you get out your calculator. NJ’s greedy envycrats will exact about $200K for the honor of letting you move to NJ, and that’s before property taxes. In PA, about $60K.
And with every million more you make, NJ costs you $70K more than does PA.
Even to "the wealthy", that’s real money. So, how long does it take to make up your mind?
Now, imagine you’re a rationale governmental official, and you wish to design a tax system which raises a consistent stream of revenue while not undermining the economy. Reviewing the above scenario, as well as the roller coaster revenue numbers of the last two years, only one possible conclusion exists: flat tax. Not disproportionately dependent upon taxpayers with extremely variable earnings, the system provides a much more stable stream of revenue. Furthermore, since it treats everyone fairly and does not punish success, it encourages businesses and persons of means to locate here. Which provides prosperity, increasing tax revenues, etc. In short, everyone wins.
NJ has been slowly creeping away from such a fair system of taxation in favor of one based upon envy, and both our economy and our tax collections show the baleful effects of this foolishness. Revenues vary wildly, while the confiscatory rates imposed by the apostles of envy in the name of "fairness" undermine the economy. Even during good times, our economy generated not a single private sector job since Envycrat in Chief Jim McGreevey took office, and our budget is in a perpetual state of crisis.
At the risk of being "off message" and, hence, attracting the attention BlueJersey – which, apparently, is so unaccustomed to hearing a politician speak the truth that it gave special attention to Assemblyman Malone’s admission that both parties share responsibility for the present mess – both parties share responsibility for the present mess. Because both parties adopted idiotic, liberal policies.
Under Kean and Florio, progressivity became a fact of tax life here in NJ, but under Whitman, the GOP, rather than restoring the tax to its flat tax antecedents, instead removed increasing numbers of modest income folks from the tax rolls. That’s horrible policy. First, as President Obama is fond of reminding us, we’re all in this together; everyone – without exception – shares the responsibility for attending to the costs of government. Second, creating a vast cadre of voters who don’t pay taxes, is a recipe for disaster; it creates an incentive to support spending, because they’re not paying any share of the freight.
But, as bad as the GOP policies were, under Jimmy McGreevey, unabashed class warfare became the rule of the day. In what amounts to theft by government, he unashamedly imposed a huge tax increase on the most productive members of society, promising to give their money to others. Naked redistributionism. In short, he told every successful resident that their earnings were fairly subject to distribution by majority vote. What you earn or own is yours only by the grace of government, which may properly seize it and hand it to those who have not earned it.
Comes now Governor Corzine. To quote myself, Jon Corzine’s capitalist brain is at perpetual war with his socialist heart. Alas for NJ, his heart almost always wins. This year’s budget features yet another massive, envy-based income tax hike directed squarely at the most productive sector of society. Had some fiend, bent upon destroying the NJ economy, designed a plan to ensure its collapse, he could hardly do better than to emulate the disastrous policies pursued by McGreevey, Corzine, and the Democratic legislative majority. The fact that NJ continues to slide further behind its lower tax neighbors demonstrates, to anyone with the slightest degree of impartial judgment, that attacking "the rich" is a fool’s errand. Inevitably, when the Left aims at the rich, it hits the poor.
Now, due to a windfall of tax collections (query whether the Dems will propose that tax amnesty become an annual event?) the budget is $500 million or so closer to balance. Will the capitalist heart finally prevail? Will Hizzonor abandon his request for profoundly destructive tax increases? Will he abjure the effort to buy votes with other people’s money?
Instead of foreswearing tax increases, which might start NJ down the right road, Corzine proposes to retain the confiscation, thereby ensuring NJ’s continued economic decline, and to restore rebates. Massive tax increases will expropriate money from those who earn it, and rebates will distribute it to those who do not. Is there anyone stupid enough to believe that this constitutes good policy?
This rebate scam constitutes yet another attempt to buy votes with other people’s money. McGreevey redux, it funds unsustainable, one shot, election year goodies for some with huge, permanent tax increases on others.
Instead of perpetuating the rebate boondoggle – is there anyone left who doesn’t agree that the program was profoundly dumb from the git go? – use the windfall to abate the proposed tax increases. That might stop some of the economic hemorrhaging, setting the stage for further tax cuts as the economy rebounds (as, inevitably, it will, unless Obama and the national Dems succeed in taxing and spending us into bankruptcy). The ultimate goal should be the repeal of all the McGreevey Corzine tax increases, the adoption of a low, flat tax rate, ala PA, and the complete abolition of business taxation. Far better to collect 3% from an ever expanding group of successful and prosperous citizens than 10.75% from the three rich socialists (Corzine, Bon Jovi, and …; OK, two) who believe that ideology can trump the laws of economics.
As prosperity benefits everyone, governmental policy ought to be that which best encourages it. Corzine’s proposed policies move in precisely the opposite direct.