Jim’s bad idea
I was reading yesterday’s newspaper, In Short Hills, a yawn over ‘millionaire’s tax’, and found out that
Gov. James. E McGreevey unveiled a “millionaire’s tax,” going after households earning $500,000 or more. . . to increase the state income tax from 6.37 percent to 8.97 percent for New Jersey households making over $500,000.
The resulting $800 million would be distributed to every New Jersey homeowner earning less than $200,000, in the form of property tax rebates.
So, now we have the governor in Robin Hood mode, scalping the rich to “give” to the middle class while punishing success.
What the state needs is to review its budget and cut down on expenses, and for government to downsize itself (an oxymoron if there ever was one). Instead, the proposed “millionaire’s tax” will have the effect that kind of tax has always had: It will drive away from the state the very people responsible for creating jobs and expanding businesses. They won’t respond with “a yawn” — they’ll move. It’s happened in Europe, which is why Luxembourg and Monaco and the island of Jersey are such popular spots for their well-to-do neighbors. If New Jersey was an island it would be harder to move a business, but NJ is near states that have much better deals — The Bucks County, PA chamber of commerce can thank NJ for the number of new residents and business already fleeing NJ — so the “millionaires” don’t even have to leave this part of the country. Here are the tax brackets for neighboring states:
CONNECTICUT 3.0 – 5.0%
DELAWARE 2.2 – 5.95%
MARYLAND 2.0 – 4.75%
If the “millionaires” want to stop playing the state income tax game altogether, there are also Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming, which have no state income tax at all, and New Hampshire and Tennessee where the state income tax is limited to dividends and interest income only. I wouldn’t be surprised if several “millionaires” already own, or are contemplating owning,homes in those states, and can declare them as their primary residence.
The point is, no amount of punishing taxes will solve the root cause. As one of the people in the article put it, they’re avoiding the real issue — which is how the state is going to solve its budget problems
And while you’re at it, take a look at Paul‘s article explaining how affordable-housing laws are making housing less affordable, and pointing out the fact that the state government’s in the grip of the big developers, if campaign contribution data are any indication.