WHAT AID? WASHINGTON’S FISCAL CLIFF DEAL WILL DISPROPORTIONATELY BURDEN NEW JERSEY TAXPAYERS
You can count on New Jersey Democrats and some key Garden State Republicans, too, to pitch a fit in the coming days over Speaker Boehner’s decision to delay a Sandy relief package vote until the new session of Congress begins later this month.
Whatever, Save Jerseyans. I stand by my original position, that considering New Jersey and New York taxpayers’ hugely disproportionate share of the federal tax load, a targeted tax holiday would be superiorly beneficial as residents and business continue the clean up process to a pure aid-to-government only package.
If you don’t believe me, yesterday’s fiscal cliff detour vote might help put things in perspective…
Contrary to media spin and some very careful wording peddled by its backers, the fiscal cliff bill will actually raise the tax burden of better than 77% of Americans going forward. The Wall Street Journal‘s Laura Saunders did a good job of detailing some of these “backdoor increases” which you haven’t heard about on the nightly news.
And since it’s true that these increases will disproportionately affect the wealthy, states with disproportionately large populations of high income earners will be the hardest hit.
Like New Jersey.
The New Jersey Chamber of Commerce recently acknowledged the peril, noting that “[w]hile high-income earners represent less than 6 percent of New Jersey taxpayers, they account for nearly 57 percent of all federal personal income taxes paid from the state, compared to less than 50 percent nationally, according to a study by the nonpartisan Tax Foundation.” Remember: because so many well-to-do folks call our state home, the IRS collected approximately $112.1 billion from New Jersey taxpayers in 2011.
And we all know what happens when taxes are hiked on the rich, folks: they rich invariably flee to other jurisdictions where they are permitted to keep a larger percentage of their income.
We haven’t done the new math yet; for all the reasons above, I suspect New Jersey will initially send more than $112.1 billion to Washington, D.C. in the wake of these increases… until the economy’s bottom completely falls out under the crushing weight of the newly-augmented tax burdens of our economy’s largest employers.
And did I mention that only about $9 billion of total $60 billion package will be spent in the next nine months (per the CBO)?
So the next time you hear a politician who backed this fiscal cliff deal complain about Speaker Boehner “holding up” a $60+ billion Sandy aid package, Save Jerseyans, complaining about the plight of their citizens, please don’t lose the irony. You know better for having read this post and shared it with your friends/family.