Taxes Don't Matter

The latest news from The New York Times: "rich" people feel a draft, and the not-so-very-rich catch cold.

It seems that a lot of "rich" guys who got stomped by the downturn are taking it out on landscapers and tradesmen. In one ritzy Connecticut area, one landscaper laid of half his men and mothballed half his trucks. Quoth said entrepreneur:

"Let’s talk about all the delis who depend on my guys," he said. "What about my insurance agent? I’ll use less trucks so that’s less money for him. What about my mechanics who depend on fixing those trucks?"

While the story never uses the words "trickle down", by gummy it seems that when "rich" folks stop spending, its "poor" folks who suffer! Whoda ever thunk it?

Indeed, another report laments that spending on "luxury" goods is down about 1/3, and who’s hurting? Not the "rich", but the 600 folks who lost their jobs here in NJ when yacht building shut down.

Now, who’s likely to be hurt most when the socialist/liberals start raising taxes on ‘rich" folk?

The "Progressive States Network" recently sent a E-mail, contending that taxing "rich" folks benefits the economy. Now, what’s scarier; the fact that some of these folks actually believe it, or that most – who are far too intelligent to accept such obvious bovine excrement – say it anyway?

Consider a few examples:

people flock to Ikea in Urban Enterprise Zones because the sales tax is half as high;

New Yorkers traditionally journeyed en masse to NJ for clothing purchases, as NJ imposed no sales tax, while NY did;

people flood across the border to buy cigarettes in PA and DE, to such extent that NJ felt compelled to hire tax inspectors to police convenience stores in neighboring states;

people routinely turn to catalogues and the Internet to purchase goods; no sales tax;

under Florio (and Jon Shure), NJ imposed a heavy truck tax, and just about killed such sales in NJ;

under Clinton, the Dems imposed a luxury tax to nail the "rich", only to destroy the yacht, limo, fur, and jewelry trade (they hastily repealed it);

The Obama Administration enjoys a surfeit of "rich" folks, true believing leftists all, who didn’t merely legally avoid taxes, but illegally evaded them.

But, sayeth the left, taxes don’t affect behavior.

Right.

Helpfully, our "Progressive" friends provided lots of links to stories and sources purporting to demonstrate that high taxes and economic prosperity happily coexist. Consider this whopper:

"Back in 2004, as New Jersey struggled with both a budget deficit and calls to lower the property tax burden, the state created a new 8.97% tax bracket for those making $500,000 per year or more. Only 30,000 households saw a tax increase, while 1.8 million households saw a tax cut."

Curiously, I haven’t met, or heard from, a single one of those 1.8 million folks. They must all live in South Jersey.

But our Treasurer and our Governor both aver: NJ isn’t overtaxed. Only socialists and public employee unions agree.

The high tax states that the Left celebrates are awash in debt, facing huge, perpetual structural deficits, growing nothing but government, and the economic picture deteriorates by the hour. (The link they provided for proof that "High Income Tax States have Strong Economies" produces a ten year-old press release; ain’t worked out quite so well since then, fellas, has it?) High tax states – CA, NJ, NY – are suffering the worst hits, precisely because their tax structure is "progressive".

Indeed, when a study arrives at a patently counter-intuitive result – high taxes don’t matter – checking ELEC, FEC, or public employee records tends to confirm the suspicion: they’re either dedicated socialists, have their hands in their neighbors’ pockets, or both. Here in NJ, for instance, a Princeton prof – specializing in Latin America – brought his expertise to bear on NJ and concluded that the "millionaires tax" did not result in net outmigration of "rich" guys. Hmm, lessee ... donations to Barack Obama, Al Franken, Rush Holt, John Edwards, and self-described socialist Bernie Sanders. Astonishingly, he arrived at the conclusion that tax increases don’t matter; who could have guessed?

Over the past 30 years or so, under both Democrats and Republicans, NJ tried Big Government. It started under Byrne, continued under Kean (118% growth of government) clipped along under Florio, paused somewhat under Whitman (but she borrowed too much and acted irresponsibly on pensions), then exploded under McGreevey, Codey, and Corzine. The result?

Disaster. Taxes through the roof (and not just for the "rich"). Spending and debt at astronomical levels. Public employment up massively (see "taxes through the roof", supra) and private employment, at best, static. People fleeing the state in droves (perhaps landscapers and tradesmen whom the "rich" can no longer afford to employ) and the public employee unions – understandably, as they serve their members, not the taxpayers – not merely opposing cuts, but demanding ever more.

There is one – and only one – solution: less government. We can’t afford universal(or, indeed, any publicly funded) preschool. We can’t afford COAH. We can’t afford to spend $25K per kid in Abbott districts. We can’t afford teachers’ contracts increasing 4% per annum. We can’t afford school supers making $250K plus. We can’t afford lifetime health benefits or defined benefit pension plans. We can’t afford "prevailing wage" public construction contracts.

We’ve tried it their way, "spreading the wealth around"; massive government to "help", and only managed to strangle the economy. Perhaps, just maybe, it’s time to abandon the politics of envy and try something which actually produces prosperity: freedom.