Murray Sabrin's Blog

Steve Lonegan's tax plan is based on the following core idea: "My flat tax plan will start with a flat tax rate of 2.9% on every dollar earned. The rate will decrease to 2.5% the following year, and further to 2.1% in the third year.  (Emphasis added)

Thus, the Lonegan flat tax plan presumably eliminates all deductions, exemptions, and credits.  According to the latest available data from the Treasury, these exclusions from gross income total $26.8 billion.  Seniors would lose their $2.1 billion retirement income exclusion; all taxpayers would lose another $10.2 billion of exemption deductions; another $5.8 billion of deductions would be ended, virtually of all these deductions are for unreimbursed medical expenses; and taxpayers would no longer be able to deduct $8.7 billion of property taxes to offset their state income taxes. 

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Governor Corzine is proposing to hike taxes on the highest income earners in the state to help balance the 2010 budget.   The Governor promises that the tax hike will be for one year only.  But as the late economist Milton Friedman once quipped:  "There is nothing as permanent as a temporary government program."

Rather than halt or at least reevaluate his collectivist/redistributionist crusade, Governor Corzine wants upper income families to pay for a greater proportion of state spending, even though they receive few government "services".  He believes that government is the best way to help the most vulnerable in our society, neglecting the overwhelming evidence that the welfare state is unsustainable.

Last Friday, May 15th, would have been my father's 95th birthday.  During World War II Abraham Sabrin was a partisan commander in his native Poland where he led 231 men and women in combat against the Nazis.  He and his comrades-in-arms were finally liberated by the Russians in July 1944.   After the war my parents decided to immigrate to America, and on August 6, 1949 our family arrived in New York in order to live a free and peaceful society. 

Dad provided invaluable advice while I was growing up in Manhattan and the Bronx:"Get an education; there is a right way and wrong way...always go the right way."  And when I told him, in 1997, I was running for governor, Dad did not hesitate to offer this gem:  "Remember, politics is dirty."  Although Dad did not have a Ph.D. in political science, he understood human nature and American politics very, very well.

Tomorrow the first of two ELEC sponsored GOP gubernatorial primary debates will be held in Trenton at NJN.  Because both Chris Christie and Steve Lonegan, the GOP front runners, have raised at least $340,000 and have accepted state matching funds they are required to debate twice. 

Assemblyman Rick Merkt, the other GOP candidate in the race, has not met the matching funds threshold and is being excluded from the "official" debates.  This is wrong.  ELEC should invite Mr. Merkt to debate Chris Christie and Steve Lonegan.   

A cornerstone of Steve Lonegan's gubernatorial platform is a flat tax to replace New Jersey's very steep progressive income tax.  Lonegan proposal is stated on his website: "My flat tax plan will start with a flat tax rate of 2.9% on every dollar earned. The rate will decrease to 2.5% the following year, and further to 2.1% in the third year. Moreover, the rate will only be changed thereafter by a super majority of the state legislature."

Current income tax rates in New Jersey start at 1.4% and rise to 8.97%.  For most of New Jersey's taxpayers Lonegan's plan would mean a substantial tax cut.  That's the good news.  In addition, a super majority vote in the legislature would be needed to change rates in the future.  Really good news.  However, for the lowest income earners in the state, their taxes would more than double initially under Lonegan's proposal and their tax rate would still be higher (2.1%) than they are now after Lonegan's tax plan is fully implemented.  That's the really bad news, both economically and politically.

Former state senator Joe Coniglio of Paramus was convicted last week for influence peddling, among other crimes.  Specifically, Mr. Coniglio was found guilty of using his office to obtain a $5,000 month "consulting" contract from Hackensack University Medical Center, and in return the former senator funneled state grants to the hospital.

If Joe Coniglio is guilty of influence peddling, then virtually every state legislator is guilty of the same "offense."  Routinely, businesses and nonprofits as well as county and municipal governments receive state grants because "their guy or gal" has clout in the state legislature.  That's the nature of our "democracy" in Trenton.  Bringing home the bacon-taxpayers' money-to the well connected.  In other words, Joe Coniglio was crucified by the justice system for the sins of the politically powerful who have been directing taxpayer funds to their favored constituents and campaign contributors for decades.

Prof. Murray Sabrin

It's almost April 15th, the most hated day of the year.  Don't believe me?  Let's have an experiment.  How much money would the IRS collect if the American people did not "voluntarily" comply with the tax code?  I would wager a substantial amount of money that that the American people would not volunteer to send in the estimated $1.2 trillion the feds expect to collect under our compulsory tax law this year.  Why?  Deep down the American people know they are getting ripped off by the Washington's welfare-warfare state policies.  

In New Jersey, the income tax--the property tax relief fund--was enacted in 1976, and the first rates were 2.0% on incomes under $20,000 and a flat 2.5% rate on incomes greater than $20,000.  Over time, tax rates became "progressive" rising to nearly 9% today.  Governor Corzine wants to raise the top rate to more than 10% ("temporarily") to balance the budget next year.  I would also bet a small fortune that the people of New Jersey would not voluntarily send in any where near the $11 billion in personal income taxes Trenton expects to rake in this year.

Jon Corzine grew up on a farm in the country's heartland.  Presumably, he milked a few cows growing up.  As governor, Jon Corzine has continued to milk not cows but middle and upper income individuals and families to implement his vision for New Jersey.  Governor Corzine's vision for New Jersey can by summed up in one word: entitlement. 

Governor Corzine is unashamedly going around the state arguing that it is his duty to impose higher taxes on those families making more than a $500,000 by raising their marginal income tax to more than 10% so he can preserve and expand a whole host of spending programs.  Supposedly, the income tax surcharge will be imposed only for one year.  Wanna bet?  

With the release of an audio tape from Osama bin Laden on the eve of the sixth anniversary of the U.S. led invasion of Iraq, did the most wanted fugitive on the planet signal that another Al Qaeda attack on America is imminent?   

There has been a pattern to the attacks on America by Al Qaeda since the February 1993 bombing of the World Trade Center.  Although the attack injured more than a one thousand Americans and killed six, newly elected president Bill Clinton did not launch a global "war on terror" in his first year in office.  Instead, U.S. law enforcement authorities successfully hunted down the perpetrators who were then tried, convicted and jailed. 

Governor Corzine delivered his fourth budget address to the Legislature yesterday asserting "we are living within our means."  This has been a favorite theme of Democrats since 2001 when Jim McGreevey campaigned against the Whitman-DiFrancesco spending spree of 1998-2001, and in 2005 Jon Corzine campaigned as a savvy Wall Street manager who was going to shake up Trenton and impose more fiscal discipline on spendthrift career politicians. 

When former president Bill Clinton declared in his 1996 State of the Union address, "The era of big government is over," Republicans gave him a standing ovation and cheered wildly.  Clinton easily won reelection to a second term by running to the "right" of the hapless GOP nominee, former senator Bob Dole, who expressed admiration for the welfare state.  Ross Perot also was in the race and grabbed only 9% of the vote, after a strong third party run in 1992.