promoted by Rosi
(Cross-posted at BarbaraBuono.com)
It’s no secret that New Jersey’s tax system is regressive. When looking collectively at the state’s income, property, and sales tax, the lowest income group pays 10.8% of their income to these taxes, while the highest wage earners pay 9% of their income in taxes. After federal deductions, that gap widens, with the lowest wage earners paying 10.7% of their income to taxes, while the top earners pay a mere 7.4% of their income.
Astonishingly, Governor Christie recently announced a proposal that would further widen this gap; he plans to cut the income tax for the wealthiest New Jerseyans. Upon learning about this proposal, the Star Ledger asked, “Is he kidding?” and forcefully denounced the Governor’s plans to hand the wealthiest “a tax cut that would blow a new hole in the budget.” No, the Governor’s not kidding. And that’s quite concerning.
Here’s the problem: New Jersey’s income tax is constitutionally dedicated to property tax relief. So when we take in less money from the income tax, we further shift the tax burden onto the middle class. This will result in a reduction in funding to our public schools (after all, the property tax is the primary source of education funding in New Jersey), as well as an increase in property taxes at a time when many are struggling to simply feed their families and make ends meet.
There’s more after the jump.
The Ledger made a powerful case about the Governor’s priorities, citing the nearly $1 billion cut to New Jersey’s system of public education, the loss of property tax rebates for middle class families, and the cuts to the pension and medical benefits of retirees. And let’s not forget the complete elimination of funding for Women’s Health and Family Planning Services. All of these programs were casualties of the dire fiscal environment in New Jersey. Yet somehow the Governor is attempting to justify a tax cut for the wealthy.
That kind of logic flies in the face of the “shared sacrifice” rhetoric that we’ve heard so much about. Beyond that, tax cuts for the wealthy simply don’t make sound economic policy. The Bush-era tax policy already proved that the old “trickle down myth” is just that – a myth, not a viable means of stimulating the economy. But more recently, a non-partisan analysis demonstrated that the richest among us save their tax cuts, rather than use them to create jobs or stimulate the economy – something many of us have long suspected.
Let me be clear. Tax cuts can help stimulate the economy. After all, consumer spending constitutes 70% of the national economy. But studies show that those at the top of the financial food chain simply pocket their tax cuts, rather than circulate it back into the marketplace. Therefore, if anyone should be getting more help from Trenton, it’s our working families, not those who already pocket a large portion of what they earn.
We should be focused on creating jobs and stimulating the economy to help everyone make ends meet. We cannot blindly follow economic policy that has proven itself futile, and quite frankly, destructive. We cannot further shift our tax burden onto the families that are already struggling, while giving those at the top of the income scale yet another tax break. Not only is it unfair, but it’s unsound policy.