Attention Trenton! We need a Tax Cut ASAP
By Scott Alexander | The Save Jersey Blog
What we need in this state more than anything else is a tax cut, Save Jerseyans.
Deep property tax cuts would be ideal but until that occurs, income tax cuts will work. Governor Christie is proposing an income tax credit up to a $10,000 limit based on 10% of your property taxes paid and phased in over 4 years. In addition, there is an earned income tax provision of his plan. The Democrats say we can’t afford it but I say we can’t afford not to figure out how to make it happen.
What we need to get our economy going is a strong housing market. A strong housing market increases sale prices, cash flow and revs up the economy. A stronger economy helps to generate jobs. The lynch pin is property taxes since they greatly influence the housing.
Unfortunately, the Garden State holds the distinction of having the highest average property taxes in the nation. Go figure, but we also hold the title for the U.S. state with the highest exodus of residents according to the United Van Lines’s 2012 Migration Study. Property taxes and climate are the two biggest determining factors for migration. Raising the temperature is difficult, though might be easier than reducing property taxes!
The options on the table are to reduce property taxes or slow their growth rate. The Governor has begun the process of slowing the growth rate by introducing the 2% cap. The strategy here is that while we slow our growth rate other states will increase their taxes faster and, over time, take over our #1 status on the property tax charts. This takes time and assumes that other states aren’t slowing their tax rates too as to become superiorly competitive. The Governor cut the growth rate in half from 2010 to 2011, saving NJ tax payers over a billion dollars since then. A great start!
Option two involves reducing property taxes and is a better choice to help get our economy going. The issue, however, is that reducing property taxes is a bottom up approach. In other words, it is on the shoulders of each taxing entity to find ways to reduce expenses and or increase revenues to reduce their tax levies, not the dtate. In 2011, 93 New Jersey towns (16% of all towns) reduced taxes at an average of 2%. Only 473 to go and there needs to be much bigger reductions to get the attention of out-of-state home buyers. Reducing expenses and increasing revenues takes effort, and at the same time many special interest groups and vendors do not like it when expenses are cut by taxing entities.
One idea I have is to order the NJ Local Finance Board to review and compare each taxing entity budget line by line to benchmarks of well-run taxing entities. When spending is out of line with the benchmarks, we should require local officials to explain at a public meeting the details as to why they missed the mark. I think you will see a lot of expense reduction and tax decreases under this system.
Governor Christie has looked at the both expenses and revenues at the local and state levels, and he knows what he is talking about. We need him to keep pushing for tax cuts, any cuts he can get. And we need our Democrat legislators to stop playing election year party politics and pass a budget that includes tax cuts or credits.
We need property tax relief. The $100 tax cut for the average NJ citizen is not the answer. The Christie proposal, in the same vein as the Bush tax cuts to the 1%, is not the answer. Trickle-down economics is voodoo economics.
The author of this post explicitly says property tax relief is preferable. But when the Democrat legislature refuses reforms that would clamp down on property tax-driving policies, any relief capable of putting more $$$ in taxpayers' pockets is a good thing.
I still say income tax cuts will only benefit the 1% who are already doing well the past four years on Wall St. under "Marxist" Comrade Obama. When is enough, enough? Can the hamlets and fiefdoms of NJ give up power and patronage and have more shared services and consolidation?