On Sunday, The Newark Star-Ledger breathlessly reported the results of a Legal Services of New Jersey study.
The major finding? “New Jersey’s top 20 percent saw their average income rise by 22 percent from 2000 to 2009.” Uh-oh! The not-so-sublte implication (or so I’m guessing from the context of the article) is that Chris Christie’s refusal to revive our state’s defunct millionaire’s tax is misguided. That the rich are “flourishing” and the poor are suffering for it.
Wrong! Not even close.
There’s plenty to criticize about this particular study, Save Jerseyans, not the least of which is the researchers’ interesting choice of dates.
For starters, “income” (which this study measures) is an inherently unreliable measure of true “wealth.” That’s because the “rich” pay much higher tax rates across the board; hence, they get to keep a much smaller relative portion of their post-tax income than lower income citizens. Also consider how income doesn’t take into account (1) government redistributed wealth and (2) non-income employment benefits. I’ve examined for you at-length the effect on $250k income earners; the effect is far more pronounced as you move up the chain. So really “income gap” might be a more accurate phrase than “wealth gap.”
Along those lines, and concerning the employed date range, we need to keep in mind how virtually no one in the private sector is doing better under Obama – the rich included. It appears that the Legal Services study’s range is deliberately elongated to include more favorable, profitable years for wealthy individuals (during President Bush’s tenure, ironically enough). Unfortunately for all of us (and the survey’s accuracy) those heady days have come and gone. The 1% of top income earners saw their share of our nation’s income drop like a rock to 17% in 2009 from 23% in 2007, and their profits have continued to decline throughout President Obama’s first term.
That’s all according to federal tax data analyzed and reported by… The New York Times. Hardly a conservative mouthpiece! To the extent a gap really exists, Save Jerseyans, Obamacare’s “taxes” and indirect effects will certainly exacerbate and accelerate income disparities between America’s rich and poor. As one Forbes contributor pointed out in June, “it actually hurts them [the poor] because it represents a bigger portion of their income that someone else controls, and it means a loss of income as a greater percentage goes to health coverage.” A hard truth for even the most talented spinmasters to dispute.
But back here in New Jersey, Governor Christie didn’t take office until January 2010… a full year later than the tail end of this survey’s range of inquiry. And guess what? The first “millionaires’ tax,” enacted in 2009 for a one year period by an all-Democrat state government led by former Governor Jon “M-F’n Global” Corzine, pushed the state income tax rate for those earning more than $500,000 from 8.97% to 10.25%; the new top rate, aimed at those earning more than $1 million, was pegged at a staggering 10.75%.
All of this was done pre-Christie despite a mountain of evidence proving that higher income tax rates were actively decimating the state’s revenue stream as residents and businesses fled to places like Florida (where there’s no income tax) or Pennsylvania (where they have a 3% flat income tax and much lower property taxes). It’s also worth remembering that the millionaire’s tax was just one hike of 115 taxes instituted in the eight (8) years preceding Governor Christie’s oath of office, all by liberal Democrats. Before Corslime’s assault on millionaires, he imposed a regressive 1% sales tax hike to spread the pain around. Before him, Governor McGreevey raised corporate taxes and hiked the top income tax rate for “half millionaires” from 6.4% to 8.97%.
None of these stats address property taxes, the state’s single largest drain on wealth, which jumped approximately $10 billion between 2002 and 2008 as the cost of any and all services provided by public sector unions continued to explode. They’ve funded a rapid and devastating increasing in state spending: from a $15.9 billion budget in 1996 to nearly twice that amount just one decade later.
So with all of this history in mind, Save Jerseyans, I’m left to ponder the curious correlation between (1) New Jersey’s allegedly growing wealth gap and (2) New Jersey’s growing tax burden. Put another way, even if there IS an honest to goodness wealth gap in America and New Jersey specifically, why isn’t an ever-expanding government welfare state — financed by ever-increasing taxes on the wealthy — having the desired equalizing effect?
The answer should be obvious enough: wealthy people lay off less-wealthy people and sit on their remaining wealth when liberals try to confiscate larger portions of it. The income gap will then necessarily appear larger between the still relatively rich guy and the newly unemployed guy. But neither man is economically better off. And the rich can do one better when crap hits the fan because this is a free country; they can move to another, cheaper state and take $70 billion in wealth with them over a four year period… like happened in New Jersey between 2004 and 2008 when McGreevey/Corzine were hiking every tax in sight in the lead up to the Great Recession.
The inevitable conclusion is that income inequality in the Garden State is a product of liberal redistributionist policies, Save Jerseyans. You won’t read that in the Star Ledger but the facts are overwhelmingly supportive of my thesis. Sadly, nothing will change until the legislature experiences a dramatic transformation.
"They would rather the poor be poorer, provided the rich were less rich. That way you will never create wealth or proper social services."-The Iron Lady Margaret Thatcher
http://www.youtube.com/watch?v=okHGCz6xxiw
What would we do without Save Jersey to call out the Star Liberal, er, Ledger!
Matt Roney another idiot conservative who doesn't care about the poor cause he's rich and doing fine. What an idiot….
"agent of change" One, your spelling and grammar is impecable. Two, the cowardice of your anonymous user-name is duly noted. Lastly, do you consider a median 5 figure salary "rich?"…because that's what lawyers who are just starting out are making nowadays. If you think $40-$60k a year is "rich and doing fine", it seems Rooney is not the only idiot on this blog…
When will people understand that the willingness to take responsibility for what happens to you, and to make things happen, is the beginning not only of healthy thinking and exciting productive careers, but also of a life of integrity, standards and relationships. These things must be taken on by the individual not by the state for you ….
So the answer to "not caring about the poor" is to make more of them? Stop it with the liberal nonsense.
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Can I just say what a relief to find a person who actually knows what theyre dealing with online.
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