Tag Archive: class warfare

Putting a face to the impact of Christie’s Millionaire Welfare program

The other day, I talked about how Governor Chrisite’s Millionaire Welfare program is disastrous for the health of New Jersey, and a few weeks before that, I talked about how income tax cuts in general are the problem, not the solution.

Today, I want to hammer this home by putting a human face on the impact and suffering of New Jerseyans due to the heartless, downright cruel and absolutely unnecessary government giveaways to the super duper rich.  I’ll start in Passaic, where over 200 disabled residents, many elderly and on a very limited fixed income must now pay an annual fee for a handicapped parking space that they were not charged for in years.  


“I didn’t want to make this tough decision, but we are being forced to at this time,” [Mayor Alex D.] Blanco said.

—snip—

“We hate to make these kinds of decisions,” Schaer said. “They strike at the quality of life. But with cuts we have gotten coming from Trenton and coming from Washington, we are the last stop.”

I’ll note that the tax savings from just one person earning $1,000,000 under Christie’s proposal would pay for virtually every single handicapped parking fee.

But the downgrade in the quality of life for New Jerseyans doesn’t stop there.  Those of us who take NJ Transit know all too well the significantly more erratic and lower level of service that we now get along with our higher fares so that millionaires can enjoy their lavish lifestyle.  

And while private security services in gated communities won’t be suffering, all across the state there are cuts to public safety due in large part to more cuts in aid from Christie’s budgets.  

Let’s also not forget Christie’s massive cuts to public education (as you’ve read here in great and painful detail), despite NJ consistently having one of the top ranked public school systems year in and year out – or that his cuts were slapped down in court and totaled nearly $1 billion his first year in office – a time when he cut taxes on corporations and on millionaires – two things that have not led to any measurable or direct job growth or economic activity.

And in possibly one of the unkindest cuts of all, drastic cuts in state aid to NJ nursing homes that care for the sickest of patients left them far short of the necessary funds, and could very well mean layoffs to staff at these nursing homes.

Clearly, the disabled, the elderly, the sick, the state’s children (and future), public safety and those working class families who use public transportation can stand some more service cuts and increased fees so that Christie’s base can get their government handouts and enjoy more luxury cars and vacations.

Income tax cuts are the problem, not the solution

Much has been made about income taxes and income tax cuts – not just by Republicans, who base their entire economic plan on less taxes (which of course will usually vastly benefit their base by every conceivable metric), but also by Democrats lately as a way to provide stimulus or help in a time of need.  And right here in New Jersey, Governor Christie’s plan to cut income taxes by 10% across the board is very short on details about how the potential $1 billion+ deficit would be paid for.

As a tax professional, there are so many things wrong with this, not the least of which is Christie’s statement about how everyone shared in the belt tightening over the past two years.  If you remember, Christie gave the top earners a tax cut by letting the tax surcharge on the top income bracket expire – all while cutting the earned income tax credit, reduced property tax rebates, cut public transportation services, increased tolls and other fees that hit everyone BUT the top income earners hard.

But that really isn’t the point I really want to make here, which is that these income tax cuts (1) will not materially help those who are below the higher and highest income brackets, (2) will vastly be skewed towards those in the higher and highest income brackets and weren’t really sharing in any “belt tightening” in the first place, (3) don’t add jobs, (4) are far worse of a stimulus to the economy than spending on stuff like rebuilding roads, fixing the infrastructure, or maybe a big mass transit tunnel between NJ and NY – all of which would add jobs and help the economy.

Vastly skewed towards “the 1%”

While a “10% across the board income tax cut” sounds nice, let’s see how much this would help most people as opposed to the highest earners.  Let’s use estimated NJ tax rates of 4% for a family making $50,000 and, say, 9% for someone earning $1,000,000.  The $50,000 family would have a tax cut from around $2,000 to $1,800 – a total annual tax cut of $200.  In contrast, the $1,000,000 earner would reduce the tax liability from $90,000 to $81,000, a total annual tax cut of $9,000.  Granted, this is an estimate but rounding issues aren’t going to change this vastly unfair and unnecessary giveaway.

Reduced or “no income tax” states have very regressive tax systems

Governor Christie loves talking about how high NJ’s taxes are compared to other states – not acknowledging the other states’ local income tax rates or other taxes which are higher than NJ (sales tax, gasoline tax, etc.).  So while it is great for LeBron James, it isn’t good for most others to move to Florida or Texas due to the even more regressive tax system there.

Additionally, we never hear from the Governors of NJ, FL, TX or whatever other state likes to tout their lack of income tax just how regressive the tax structure is in states with no income tax.  For example, it is pretty much a given that sales tax is about as regressive as a tax that exists (with maybe the exception of social security taxes).  Not just as it relates to the percentage of income that lower and middle income classes pay on sales tax for items that are generally necessary (food, gas, many needed services and in many states outside of NJ, clothing) but also in terms of just how unavoidable sales tax is for common necessities.

Taking a look at this sortable chart based on states, tax type and quarter or even taking a look at the 3rd quarter 2011 alone for notorious “no income tax” states like FL and TX, we see that Florida has almost 61% of its total tax collection on sales tax alone.  Florida also has a gasoline tax that is 3-4 times higher than New Jersey’s – also very regressive.  Texas has a whopping 63% of its total tax collection on sales tax alone, and a gasoline tax that is 50% higher than New Jersey’s.  By contrast, New Jersey’s sales taxes accounted for just under 39% of total tax collection for the third quarter.

How is this paid for?

This state and this country don’t have a spending problem – it is a REVENUE problem.  Despite the outright lies told and admitted to by even the most ardent right wing Heritage Foundation agrees that the Bush tax cuts permanently reduced revenues, not increased them.  New Jersey has lagged the other surrounding states in job growth, and Christie has overinflated an anemic record when it comes to jobs.

So that means the money has to come from somewhere, and if it isn’t coming from “the 1%”, it is coming from everywhere else.  Lower levels of service.  More fees.  Less for education.  Less for public safety – police and firefighters.  Less for libraries, for hospitals and public services.  Less for fixing the roads and bridges.

The real long term cost

This country’s overall infrastructure is in dire shape, consistently receiving C-, D or F grades.  Here in NJ, the last “report” in 2007 gave the state an overall C-, and little has been done to fix what was broken back then.  The costs will only increase to fix things as time wears on.  Think about how many jobs would be created for a massive infrastructure rebuilding plan.  Think about the potential for a state to be the leader when it comes to something that will help the economy, the state residents and the overall fiscal health in so many ways.

And think about what happens when the millionaires get to keep more money, more services get cut, more people can’t afford basic necessities and, say, the George Washington or Bayonne Bridge collapses.

Those income tax cuts will sure look great then.

Garrettspeak:  Social Security edition

Notwithstanding my views as someone who specializes in employment tax on the whole “payroll tax rate reduction” that was in effect for 2011 and is now back on the table for 2012, I want to offer up a perfect example of the noncommittal but hidden agenda of my representative, Scott Garrett.  Over the five years I’ve lived in his District, I have been able to learn and master the understanding of “Garrettspeak” – which is essentially the clouding of issues, justification of votes or statements with reasons that may apply at one time (states’ rights for most of his votes) but not for others (the recent vote about concealed carry laws or Terri Schiavo, for example) – and most importantly, the little nugget in most statements that show his true constituency – the upper echelon of the 1%.

Garrett was recently quoted in a NY Times post highlighting a “rift” in the Republican House caucus on the issue of the payroll tax cut.  This relates to the reduction in the rate for the employee portion of social security tax from 6.2% (of the first $106,800 in 2011) to 4.2%.

In the article, Garrett’s quote is as full of nothing as you can get in one quote:

Representative Scott Garrett, Republican of New Jersey, noted that the Senate on Thursday rejected two competing versions of a payroll tax cut. “If the Senate is able to do that, we could do it, too,” he said.

“We should not be taking money from seniors to give to people who are fortunate enough to have a job,” Mr. Garrett said.

NJ Nets & NBA: Dysfunction and Excess Among the 1%

Not a pretty picture: Millionaire players and mega millionaire owners duke it out over money while the rest of us who enjoy professional basketball are relegated to dark screens and closed arenas. What with the high ticket costs and concession prices, attending this sport, as with football and hockey, is becoming increasingly an event for the wealthy.  Exhibition games were supposed to have begun this month, but as of now the season has been cancelled through the end of november.

Wealthy players and owners are arguing over how to divide up the revenue and whether to lower salary caps.  In fact the sport has become more about money than the game, driving away fans of modest means, particular in low income cities like Newark where people love basketball but watch it on TV if they can afford their cable bills.

The solution is to reduce player salaries and owner profits so that tickets become more affordable. What a novel idea!  So great an idea that undoubtedly the 1% nationally will reduce their own exorbitant salaries and excessive profits.  A  nice thought for a snowy Saturday when electric power just went off.  

Screwing women (figuratively) to pay for an ill advised p!$$!ng match

Governor Christie has said many times that there just isn’t enough money to pay for certain programs – like women’s health funding for example.  Whenever his decrees or policies that cater to the rich and well connected are challenged, his response is “we can’t afford [X]”.

Keeping that in mind, I’m interested to see what happens here, especially in light of the additional state revenues above projections:

The state Senate has passed a bill to restore $7.45 million in funding for family planning centers that Gov. Chris Christie cut last year.

The legislation (S2899) seeks to take advantage of an unexpected state revenue boost estimated between $511 million and $913 million. Introduced last week and put on the fast track to passage, the bill cleared the Senate 26 to 13 – just one vote short of the two-thirds majority necessary to overturn a potential veto by Christie.

“We are in the second decade of the 21st century, and the fight over poor women’s access to birth control I thought was finished,” said state Sen. Loretta Weinberg (D-Bergen).

Without looking at it in a vacuum and knowing that when Christie needs to find money, he manages to find it through other cuts to everyone but the rich and well connected, we see yet another contrast in Christie’s prioirites like this pissing match with the Federal Government that is costing the state millions upon millions (not counting the close to $300 million it will cost ultimately):

Gov. Chris Christie’s fight with the federal government over abandoning a train tunnel under the Hudson has already cost New Jerseyans more than $1 million in legal fees and interest, records show.

For a month, Christie has been vowing to appeal a decision from the Obama administration ordering the state to repay $271 million for abruptly pulling out of what was the largest public works project in the country.

In the meantime, interest on New Jersey’s debt is adding up at the rate of $225,000 a month. In addition, bills from Patton Boggs, the Washington law firm hired by Christie in December to fight his battle, have averaged another $300,000 a month, invoices obtained by The Star-Ledger show.

That’s how you pay for restoring women’s health funding, especially since the legal fees to be incurred, already incurred and the interest already incurred (even if that will stop accruing) will most certainly exceed this funding before long.

A blueprint for economic disaster

Make no mistake – the demonization of public workers is just the latest in a long series of distractions by the right wing and economic elite as they pick the pockets of the “other 95% of Americans”.  This coordinated approach is nothing new, but the agenda of wealth theft is taking on a new form – and is being replicated around the country on a state and federal level.

Anyone following the developments in Wisconsin knows that this is a result of a falsely created budget deficit and an excuse to eliminate the freedom to contract by public workers – something that has absolutely no impact on the current budget.   Indiana is going through a similar assault on public employees with legislation targeting collective bargaining.  And no sooner was Andrew Cuomo elected as Governor in New York that he attached public workers.

Right here in New Jersey – a state whose public schools are consistently in the very top tier of the country, Governor Christie has attacked and demonized teachers unions, skipped out on the state’s pension plan payment in order to “balance” his budget last year, while cutting taxes for those earning over $400,000 and costing the state $1 billion in revenue.  Most ironically here, Christie talked about “two classes of citizens” but instead of talking about those who can afford such things as heat, food and medicine all at the same time and those who can’t, he focused on health and pension benefits.  Even more ironic is that these are the same people who either don’t think anyone should have “rich health benefits” or that you should only have if you can afford to pay for them.  On top of this, while Christie is being hailed by those who don’t know any better, he too is looking to raise the estate tax exemption in NJ and give more tax breaks to the wealthy.

The Oaks and the Maples

There is unrest in the forest,

There is trouble with the trees,

For the maples want more sunlight

And the oaks ignore their pleas

I’ve written a lot about class warfare (as have many others), and how Governor Christie has put forth a class warfare agenda.  Sadly, in this case, the sunlight represents very real things such as food, and it isn’t just a metaphor, as many New Jerseyans are struggling to pay for food, housing, healthcare and other basic necessities.  Tax cuts, in addition to being a horrible stimulator of the economy, don’t help families when they have little to no income as is and need a job, help with their mortgage or affordable health care instead of pennies more in their paycheck (if they even have one).  These pennies will of course go right to the credit card companies, the oil companies and other corporate entities, continuing the upward redistribution of wealth.

more below the fold

The wealth distribution of nations

promoted by Rosi

Articles like these give me more insight on ones like these when I’m totally baffled by the beliefs of my neighbors.

I think we have a national epidemic of narcissism that gives people the illusion that by voting for people like Scott Siprelle, they will have his privileges that make government unnecessary.

I feel like it has to be more complex than ignorance. And then I read something like this:

The researchers then asked people what, in an ideal world, they would like the nation’s wealth distribution to be.

Ariely and Norton found that Americans think they live in a far more equal country than they in fact do. On average, those surveyed estimated that the wealthiest 20percent of Americans own 59 percent of the nation’s wealth; in reality the top quintile owns around 84 percent. The respondents further estimated that the poorest 20 percent own 3.7 percent, when in reality they own 0.1percent.

And when asked to give their ideal distribution, they described, on average, a nation where the wealth distribution looks not like the U.S. but like Sweden, only more so-the wealthiest quintile would control just 32 percent of the wealth, the poorest just over 10 percent. “People dramatically underestimated the extent of wealth inequality in the U.S.,” says Ariely. “And they wanted it to be even more equal.”

I don’t say ignorance as a judgment or negative quality. I say it as a simple lack of information about reality, and a false belief in something empirically wrong.

It’s as if people have empathy for the rich because they admire them for gaming the system. So, people equate the enterprising spirit of a venture capitalist with their own ambitions, and rationalize that a billionaire like Sipprelle understands them better because of it. Is it about not being able to give up dreams of eventually being fabulously wealthy? It’s not like there’s a choice between “accept government services and taxes, or don’t pay taxes and save enough from that to be a billionaire.”

The New Yorker article about Harry Reid was one of the most brilliant, fascinating things I’ve read in a while, and I thought to myself, “It’s a shame that only ‘east-coast elites’ read The New Yorker,” because if people had real, unvarnished information about the politicians who have their interests in mind, they might realize why it’s such a mistake to vote for people who seek to enter government so they can dismantle government.

Christie trying to sell more debunked right wing crap to benefit the rich

The Governor who hasn’t met a perk for the rich that he doesn’t like is at it again:

New Jersey Gov. Chris Christie said he intends to reduce income taxes within two years to stimulate the economy.

A lower tax rate would help the state compete with neighbors including Pennsylvania, which has a top margin of 3 percent compared with New Jersey’s 9 percent, Christie said in a radio interview today on “Bloomberg Surveillance” with Tom Keene.

“We’ve got to do that,” said Christie, 48, a Republican who took office in January. “You can’t be competitive when your top marginal rate is three times your neighbor.”

Let’s forget the fact that NJ doesn’t have local income taxes or school district taxes like Pennsylvania or that NJ has an exemption from income tax for the first $20,000 in gross income, where Pennsylvania does not.

Instead, let’s focus on other things that have continuously debunked Mr. “I’m not good at math” when it comes to being the Reverse Robin Hood that he is…..hmm, how shall I say this?

How about this:

Tax cuts don’t create jobs or stimulate the economy.  

Or, to put it another way, cutting state corporate income taxes doesn’t create jobs.

Or, maybe a bit differently, wealthy people that get tax cuts save them and don’t “invest in their small business or create jobs”.

Christie is just looking for another tried and true failed right wing meme to shovel more money from the New Jersey middle class to the pockets of his friends and family.

Christie’s chance to bring real fundamental change

Chris Christie ran for Governor on a platform of change.  And while there’s certainly been change over the last 3 months, it isn’t the kind of change that’s necessary, or the kind many voters expected.  Big campaign talk of real change to the budget and “shared sacrifice” quickly degenerated into a game of “us vs. them”, and Christie’s “us” are the super rich and corporations against seniors, children, teachers and students, and the middle class.

It’s easy, and it’s right, to criticize Christie for who he prioritizes in his cuts, and who he targets. But Christie still has the opportunity to really do something here to fundamentally alter the way NJ runs. He can still bring the real change the people crave. And he can do it by seriously addressing the gorilla on every New Jerseyan’s shoulder: property taxes.

As Jason noted yesterday, even Christie admits now that property taxes will increase from his proposals.  And there are 2 things that need to be accepted as true because, well, they are true:

I’m a tax guy professionally.  Here are some real facts:

NJ’s sales tax falls in the middle among the states.  Ditto the state unemployment tax (the wage limit is high but the maximum and average rates employers pay are fairly low as compared to other states).  State personal income tax is also in the middle among the states for most families.  Gas tax? One of the lowest in the US.  The fact that NJ’s dead last in the country in the amount of money it receives from the federal government as compared to what its residents send is also a big issue.  We’ll leave that for another day.

Does a village like mine (Ridgewood) need local, county and state police, where there’s very little crime?  Same question for most towns surrounding mine.  What about the extra cost reflected in property tax just to have our garbage collected from the sides of houses, instead of asking us to walk our pails to the curb?  Do we need school districts with no schools?  Or 600 municipalities with their own governments and duplication of spending all across the state?  Or duplicate school administrations?  How about the costly fire department equipment rarely used?  Shouldn’t we get better negotiated contracts binding together more purchasing power?  Can we lower costs for many services spread over a larger population?

It’s time for us and our elected officials to take a long hard look at the fundamental underlying problems and begin to address them in a responsible manner.  Chris Daggett had an interesting proposal but it merely shifted the tax burden from property tax to sales tax – that doesn’t go far enough to address the underlying issues.  If Christie is really serious about bringing fundamental change to the way that NJ runs, then he has a tremendous opportunity before him. This is something he’d get support for from both Democrats and Republicans.  And it would be right.

But if he chooses to continue to indulge in class warfare and employ misleading numbers from conservative think tanks, then he fails miserably at the one thing he has the opportunity to do well. Christie can leave his mark on New Jersey. He can change everything.