The DUMB Bill

Jon Corzine represents just about everything which makes New Jersey an increasingly rotten place to live. Rather than cut governmental spending, which mushroomed out of control during the McGreevey years, he secured passage of a massive tax increase. Having courageously stood up to the taxpayers, he surrendered to the political bosses, approving hundreds of millions of outright pork with nary a whimper of protest. He dug the State into a huge hole of new debt rather than address the core problems of the TTF, and supports even more massive borrowing to subsidize morally problematic embryonic stem cell research. During the wholly manufactured budget "crisis", he threw tens of thousands of private workers onto the street on dubious grounds, stuck the taxpayers with the bill for providing paid vacation days for "non-essential" state workers, and played the cheerleader for indefensible state employee benefits.

In short, as a general rule of thumb, if Corzine supports a particular policy, the correct course is the polar opposite.

Corzine apparently recognizes, though, that to support a quasi-socialist paradise, one cannot drive all the capitalist pigs away. Put another way, a massive governmental edifice, designed to do Good Things, requires a vibrant economy.

Perhaps that explains Corzine’s refusal to consider an income tax increase, despite the Assembly Democrats’ proposal. Maybe, just maybe, even this most leftist of liberals understands that New Jersey is hemorrhaging productive, highly paid workers to states which don’t regard their citizens' salaries as collective property.

To reiterate an oft cited statistic, 350,000 citizens fled New Jersey in just the last 15 years; almost 60,000 last year alone. Disproportionately, these folks were relatively highly paid. New Jersey job growth, outside of government, is zero, despite the lengthy economic boom George Bush's tax policies produced in the rest of the country. Is it simple coincidence that our people pay more in taxes that any other jurisdiction in the country, while our economy languishes in the crapper?

Foolishly, New Jersey imposes confiscatory tax rates upon those with the greatest ability to relocate. As noted above, statistics demonstrate that growing numbers of people have accepted that invitation.

The modern Democratic Party exists as a coalition of folks with one unifying principle: the desire to wield governmental power to make someone else pay their bills. Envy motivates them. It strikes them as unfair that some people earn – or own – more than others, and they employ governmental power to address that perceived inequity. Unfortunately, the targets refuse to stay still and be taxed for other people’s benefit; they escape to PA, FL, and DE.

Whatever his other blindness, Corzine apparently recognizes this. His gargantuan tax increases, although objectionable, were "regressive", hitting everyone, not merely "the wealthy". An increase in the sales tax is infinitely less likely to induce someone to leave than yet another foray against their paycheck.

But if Corzine understands this, many of his fellow leftists do not. Perhaps, having worked at Goldman Sachs, he possesses some modicum of economic literacy. The same cannot be said for those who support the "SMART" bill.

In brief, the smart bill would increase income taxes by 50%, assertedly to cut property taxes by a similar amount. Each year, as spending/property taxes grow, the income tax would grow, too, the assertion being that most folks – 95% – would see a property tax reduction greater than their income taxes increase.

Of course, like all economically illiterate redistributionist schemes, it depends upon the willingness of the shafted 5% – you know, those horrible, undertaxed "wealthy", who aren’t paying their "fair share" – to sit still and permit themselves to be gouged. The odds of that happening approach zero.

The program is assertedly "revenue neutral", and contains no effective checks upon spending growth. The sponsors effectively contend that the underlying problem with property taxes is not outrageous spending growth, but merely the fact that the wrong people are getting the bills.

Consider this statement:

"Property-based school taxes have risen at an uncomfortable rate duringthe last decade. If we allow this trend to continue and school taxes increase at their present rate, we can expect that a significant number of property owners, unable to pay their taxes, may be forced to forfeit their homes. Public resentment, coupled with insufficient funds, may cause a school-funding crisis."

Translation: if something isn’t done to send the tax bills to someone else, we might have to (GASP! HORRORS!) CUT SPENDING!!!. Can’t have that.

Some folks – Jon Shure comes to mind – actually believe that the many attractions of New Jersey will induce folks to move here, insane tax rates notwithstanding. And he could probably point to a few examples: rich liberals, who support high taxes for ideological reasons or for whom taxes don’t matter. But most "rich" folks – those with incomes of $100,000 or more – don’t consider themselves rich and don’t believe they labor under any obligation to donate ever increasing percentages of their income to the burgeoning governmental monster. They WILL leave.

Many good ideas exist to help cut property taxes, including (voluntary) municipal consolidation, education vouchers, and other spending cuts. But any proposal which suggests increasing other taxes to cut property taxes simply cannot be taken seriously. It won’t work. And the more obvious the envy contained in the proposal -- that is, the more it tries to shift the tax burden rather than reduce it -- the less effective it will be.

There is one, and only one, solution to high property taxes: cut spending. Anyone who argues to the contrary needs a remedial course in economics.

Addendum – the PETA tax. A little noticed component of the tax bill recently passed imposes a special levy on fur products. Prediction: the tax will prove as efficacious at collecting revenue as did the Florio heavy truck tax. Instead of rasing revenue, it will kill off the fur trade in New Jersey. Great if you're an animal rights activist, but not a revenue raiser.