Monday, December 2, 2013

Taxes in New Jersey: Americans for Prosperity vs. New Jersey Policy Perspective

In rebuttal to a guest column by Daren Iwicki of Americans for ProsperityCutting taxes can lead N.J. to prosperity, the NJ Star-Ledger published a letter by Gordon MacInnes, president of New Jersey Policy PerspectiveMacInnes, who wrote in Don’t model N. Carolina:


It’s easy to call for lower taxes, as Americans for Prosperity did in its op-ed “Cutting taxes can lead N.J. to prosperity” (Aug. 6). It’s simple, if reckless, to talk of cutting taxes without also discussing cutting public services to offset the lost revenue.
Tax plans like North Carolina’s have no place in New Jersey. Enacting similar “reforms” would harm our ability to make the investments and broaden the opportunities that we need for long-term prosperity.

MacInnes also notes that North Carolina raises certain sales taxes.

"Tax plans like North Carolina’s have no place in New Jersey. Enacting similar 'reforms' would harm our ability to make the investments and broaden the opportunities that we need for long-term prosperity."

Translation: Tax plans like North Carolina's would harm the ability of politicians to seize the earnings of productive New Jerseyans at gunpoint in order to "invest" as the politicians—and self-appointed spokesmen for "we"—would prefer.


Money belongs first and foremost to the individuals who earn it. Every individual has a right to spend and invest his own money as he sees fit. Kudos to Americans for Prosperity for raising a voice for the productive people who pay for government spending.


Yes, it is "reckless to talk of cutting taxes without also discussing cutting public services to offset the lost revenue (although the Earned Income Tax Credit is a handout, not a tax credit: Cutting it is not a tax increase, but a reduction in government spending)." But Iwicki does vaguely discuss cutting spending, calling for "reducing the size of state government, getting bureaucrats off the backs of our entrepreneurs and job creators, and cutting taxes across the board." 


MacInnes notes of the North Carolina tax plan:


And by ending the Earned Income Tax Credit for working families and expanding the sales tax to new services, while also raising taxes on electricity and some home sales, the majority of North Carolina’s taxpayers — the 80 percent of households making $84,000 or less a year — will see higher, not lower, taxes.

Yes, it is a bad idea to increase others taxes such as the ones mentioned above (although the Earned Income Tax Credit is often a handout, not a tax credit: Cutting it may not be a tax increase at all, but a reduction in government spending). But MacInnes is attacking a straw man, because Iwicki calls for no tax increases. 

We need drastic reductions in tax rates and a flattening of the rate structure for fairness, coupled with major reductions in government spending on "investments" and redistribution schemes—not just as a means to spur economic growth, but as a moral imperative.  


Related Reading:

Time for a Flat Tax

Whose Money Is It, Anyway?

Patriotism and the Welfare State

2 comments:

Steve D said...

'We need drastic reductions in tax rates'

Yes we do. The maximum tax rate should be zero.

Michael A. LaFerrara said...

I agree. But a flat-rate tax with sharply lower rates and no deductions would be a step in the right direction, especially from a fairness perspective. A flat tax is a good interim reform to advocate, I believe.