Thursday, April 1, 2010

Governor Christie Rattles New Jersey's Welfare State

Newly elected Republican Governor Chris Christie presented his first budget proposal, for the 2011 fiscal year, to the NJ legislature and the state’s residents. In this post, my focus will be not so much on the details of his speech, but on a few of the responses.

“Now, finally, New Jersey will have the debate it has avoided for too long...”

So said the New Jersey Star-Ledger in its editorial of 3/17/10. Indeed. Claude Sandroff, declaring that “New Jersey is lucky to have Chris Christie”, had this to say at American Thinker:

“Christie's speech is a gold mine of reasoned arguments defining fiscal conservatism and rationality. It should be required reading for every office-seeker, local or national. Its budget details are New Jersey's, but its broad general conclusions are universal. It is also a highly moral statement of fundamental principles, for Christie completely redefines the notion of economic fairness.

“Fairness has been co-opted by socialists and other proponents of private property redistribution to justify nothing less than legalized theft. America's fairness czar, Barack Obama, is on the record as a true believer in sharing the wealth...for any uneven accumulation of wealth by individuals or nations is ipso facto proof of unfairness. Rich individuals must be brutally taxed so that income can be more justly distributed within a society. And internationally, wealthy nations, through global mechanisms -- carbon credits are the currently favored means -- must be forced to lift up poor ones.”

The Star-Ledger’s Editors, who were mostly critical of the new Republican governor, offered a different take. They write:

“As the debate begins, we offer two thoughts. First, the governor can’t possibly justify deep tax cuts for the state’s wealthiest families while he’s imposing these spending cuts. He even increases taxes on the working poor by scaling back the earned income tax credit. This is not shared sacrifice. It is class warfare.

“On the tax cut, let’s first talk semantics. The surtax on incomes over $400,000 was imposed last year as a one-year fix. It expired at the end of 2009, so some argue that Christie is not really cutting taxes on the wealthy, he is just choosing not to increase them.

“Call it what you want. But under Christie’s budget, these families will pay less in 2010 than they did in 2009. We call that a tax cut.

"The Department of Treasury earlier this year estimated the lost annual revenue at just under $1 billion. For a sense of scale, that would be enough to restore all the education cuts in this budget.”

Tom Moran, a Star-Ledger columnist writing in the same issue, is not your common knee-jerk liberal. He has supported school-choice vouchers and liked a lot of what he heard from the governor. But his socialist roots showed as he had this to say:

“Watching this man in action is a relief after the Jon Corzine years. He is decisive where Corzine waffled. His language is crisp where Corzine’s was convoluted. He is not afraid to take risks. He likes to lead.

“And his speech contained much to like.

“And then he blew it. Because he stuck with his plan to cut taxes for the rich. He asked no real sacrifice from them at a time when the state needs everyone to climb out of the car and help push.

“With this tax cut, he would hand out $1 billion to families who earn more than $400,000, the richest two percent.”

The debate that the NJ Star-Ledger sees commencing is an ethical one. What I like here is not so much the content of Christie’s budget proposals, which are nowhere near the draconian assault on the welfare state that is being portrayed, but that he drew a line in the sand. “Gov. Chris Christie is showing us what New Jersey would really look like with smaller state government”, said the Star Ledger.

Well, not really that much smaller. But he did take an implied though mixed shot at the ethical underpinnings of the welfare statists, prompting the above-mentioned comments by the Ledger and its columnist. “Class warfare”, the Ledger calls it in a bit of an overstatement. The debate, as I see it, comes down to these questions:

* What is the proper role of government? Is wealth owned by those individuals who earned it, or is it owned by the government which, as the representative of the tribal collective (society), can dispose of it at will, based upon who needs it the most?

* On a deeper level, the question is: Are we each morally our brothers’ keeper, or are we each morally autonomous entities possessing inalienable individual rights to our own lives, property, and pursuit of our own goals, welfare and happiness? Do we as individuals have an automatic claim on the wealth and earnings of others, based upon our needs. Or are we responsible for the satisfaction of our own needs based upon our own efforts?

Governor Christie said in his speech that New Jersey faces “As a percentage of the prior fiscal year’s … budget, the largest deficit of any state in America, and the largest in our own history -- by far.” At the same time, he said, “…the sad fact is that we are number one – with more state and local taxes taken as a percentage of income than any other state in America.”

Record taxes, record spending, and record deficits … the fiscal hallmarks of the welfare state. Where does all of this money go? “[M]ore than half of what the State spends every year is sent to local governments, in the form of aid for municipal government and school districts.” In other words, wealth redistribution from “rich” towns to “poor”. What’s the result? “State spending grew 59 percent from 2001 to 2008, [but] local government has exercised even less control. Spending at the local government level has risen 69 percent since 2001.”

The redistribution doesn’t stop with municipal aid, of course. The state has a myriad of spending programs for the healthcare area, for example. It wasn’t always thus.

When I began my working career in 1966, there was no sales or income tax in NJ. You read that right. The sales tax was enacted that year, 1966. The income tax was enacted in 1976. Both started at a low ebb … 2% or less, I believe. Since then, despite some backing and filling, those rates have steadily risen over time. Today they stand at record highs, 7% and 10.75% respectively. Since the main purpose for both taxes was the funding of state social services of some kind, this means that wealth redistribution is at record highs as well. Yet at the same time, the state government is drowning in red ink, as it habitually spends more than it collects. No matter how much is sucked out of our financial hides, it’s never enough. The financial drain is never-ending and growing.

Such is the nature of the collectivist premise that everyone’s needs are a claim on the wallets of everyone else, but no one is responsible for his own.

The entire “debate [NJ] has avoided for too long” is somewhat clouded by the fact that most adults are both contributors (taxpayers) and recipients of the government services that their taxes fund. But make no mistake about the essential, indisputable fact underlying the nature of the issue … the forcible redistribution of wealth. Virtually every taxpaying resident of the Peoples’ State of New Jersey falls into one of two categories – those who pay more than they receive in benefits, and those who pay less. This is in the nature of all forms of socialism. The funding of government services, from schools to colleges to municipal aid to health insurance to welfare to roads and infrastructure to business subsidies, is inherently unjust. Beneath the surface rhetoric about each resident paying his “fair share”, some people receive unearned benefits paid for by money taken by force from the earnings others.

The Star-Ledger demands that we “share the sacrifice”. By this, it means raise taxes on the “wealthy” (the most productive) to match any budget cuts. But make no mistake. There is no “shared sacrifice”. When you peal back the concrete complexities of taxation and spending, you will uncover a simple fact. There are sacrificial victims, and there are profiteers on sacrifice. Most people probably cannot know on which side of the sacrificial fence they sit. It would take a super-computer and an army of accountants to figure it out. But the facts remain. To the extent that one contributes more in taxes than he collects on government “services”, is the extent to which he is being sacrificed. If his taxes are cut, his sacrifice is reduced but still real. To the extent that one collects state “services” in excess of what he pays in taxes is the extent of his profiteering. If his take is reduced, he is not sacrificing. One can not logically sacrifice that which is not rightfully his to begin with. When the profiteer’s state “aid” are cut, he is simply cashing in less on the financial blood of the sacrificial victims.

I’m sorry, Mr. Moran, but receiving a bit less of the loot does not constitute climbing out of the car and helping to push. And a cut in the tax rate on money you earned from 10.75%, which was promised to be a one year temporary surcharge, back to the previous and slightly less confiscatory 9%, is not a "handout" of $1 billion dollars. But such is the perverse “logic” that springs from the sinister “From each according to his ability, to each according to his need” mindset that rules this state. Only when everyone is individually responsible for paying his own way on education, healthcare, funding his own town’s cops and firemen, etc., can anyone say that everyone is helping to push. But, of course, that would mean everyone is the driver of his own car, paid for by his own work. Which would mean, of course, a free market in education (no government-run schools), healthcare (no government-provided medical care), and a government that performs only its proper function – protection of individual rights.

The debate is under way, not just here in NJ, but in the nation as well. It is a moral debate. This is as it should be. The Obama agenda is accelerating the nation toward the collectivist state, explicitly driven by the president’s shrewd employment of the altruist morality card. Governor Christie has opened the morality debate here in NJ, in a diluted form. But open it he did, whether intentionally or not, and that’s what counts most in his budget proposal. However mixed his bag of political convictions, he has courageously taken the debate to the proper level. He has riled the Left, and they are getting nervous. Tom Moran refers to Chris Christie as “Governor Wrecking Ball”, not entirely meant as derogatory. His proposals are rather timid, despite the hand-wringing. His municipal and education aid cuts are at least partially need-based. He has not proposed the elimination of any state departments or programs, to my knowledge, just funding cuts. But however inconsistently, Christie’s wrecking ball has taken its first swing at New Jersey’s redistributive establishment.

Morality is the final battleground. The future of America will be decided here. The signs are increasing that the underlying struggle between collectivism and individualism is moving toward the center of that battlefield. It’s about time. We desperately need it.

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