Wednesday, December 03, 2008

TAX CHAMPION NEW JERSEY

Taxes can be a good thing if balanced to the needs of governmental services and the citizens ability to pay. And it is important that a wide cross-section of people pay taxes whether rich or poor. Otherwise there is a built in failure to take ownership of government. Instead you become a ward of the government not in just a point of fact but in a state of mind. (read the whole article in COMMENTS - below)

1 comment:

Buzz Creek said...

Taxes can be a good thing if balanced to the needs of governmental services and the citizens ability to pay. And it is important that a wide cross-section of people pay taxes whether rich or poor. Otherwise there is a built in failure to take ownership of government. Instead you become a ward of the government not in just a point of fact but in a state of mind.

That aside ..

It is well accepted now the NJ is the most tax burdensome state in the nation. And the nation is the most tax burdensome country for corportate taxes and business in general. So it is NO WONDER companies have bailed out of the United States for years, taking their factories and their jobs with them. States do the same thing. New Jersey is such a high tax environment that companies and individuals are more than eager to leave the state for more opportunity eleswhere. And they ARE LEAVING now !

It is not just a New Jersey phenomenon - but is a congenital defect of several of the states bordering the great lakes and which automobile manufacturing has been in the past a major industry. Some of those cities on the lake rim are already rust belt ghost towns. And STILL the governing powers there continue to increase the tax burden thinking it will generate more revenue for the state.

What tax increases do in such a harsh environment of reduced resources and upside down financial stability is pull in a chunk of money for one year (only ONE year). Once the word is out and the pockets of business are pinched - the emigration of business and jobs begin. Off they go. So people who want to build cars now are doing a great job in the "sun belt" where taxes and labor are not so burdensome. Cars we used to build and ship to other countries are now buillt in THOSE countries - not here. The most misunderstood phenomenon of lower taxes is that in nearly every economic environment - it causes an INCREASE in revenue to the annual tax coffers. Tax INcreases on the other hand - reduce revenue to the governing body - but it DOES create the all-important pubic impression that the rich are being soaked and the not-so-rich appreciate that sentiment when they cast their votes. So tax INcreases are about populist voter image and power - not about increasing revenue to benefit the state or nation.

As businesses and workers leave these high tax environments - they leave behind a diluted work force that is unemployed - adding to the burden on whatever funds remain available to the state. The already poor suffer even more and tax revenue that might be of some help steadily falls. The midwestern rust belt of ghost cities is an object lesson for NJ. But it wont matter. The political winds in New Jersey are predisposed to "protect the little guy" at the expense of "big business". It is a mantra that gets votes. It also gets rusted out ghost towns.

In New Jersey, you can stand at the toll booth for the Delaware River crossing and count businesses and individuals that are streaming out of New Jersey. As they leave their businesses and their homes here - they still have one MORE tax. New Jersey imposes a home sales tax on those who decide to sell and leave the state. That may just be one of the best revenue sources the state has for now.

At least that is the last time New Jersey Taxes will attack them in their search for the American Dream. They are not coming back.