I Have a Gripe

February 6, 2010

A Tax Reminder for Both State and Federal Governments

A recent study done by the Center on Wealth and Philanthropy at Boston College has found that between 2004 and 2008, wealthy households left the Garden State at an alarming rate. The study was reported on this week on NJ.com.

New Jersey lost $70 billion during the studied time period. Where did they go? States with more favorable tax laws like Florida and Pennsylvania. The bigger issue is that the wealth is not being replaced.

Between 1999 and 2004 there was a huge influx of wealth into New Jersey of $98 billion. So why the mass exodus? Economists concluded that the issue is directly related to the changes to the tax structure in the state, which included increases in property taxes, sales tax, income tax and the so-called “millionaire’s tax.”

Many will say this is just greedy rich people not wanting to pay their fair share. Well, I completely disagree. What was happening was a pure redistribution of wealth. What governments either fail to see or refuse to realize is that the wealthy people are generally the ones that own companies, create jobs and hire people for those jobs. By unfairly taxing the wealthy, the government has put the entire future of New Jersey in jeopardy.

These findings reinforce an earlier study conducted at Rutgers by Jim Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University and fellow Rutgers professor Joseph Seneca. According to Hughes, the top one percent of New Jersey’s residents pay more than 40 percent of the taxes.

So why should other states and the federal government care about this study? Well, they should consider this a shot across the bow that people are sick of being overtaxed. The government needs to stay out of people’s lives and eliminate the nanny state they have created. I think the IRS should be put out of business and everyone should move to a flat tax model (one the main reasons I supported Mike Huckabee for President and Steve Lonegan for Governor).

Why will people want to be successful and entrepreneurial if all that will happen is they get stuck paying a bigger and bigger tax bill? This is what my husband so aptly refers to as the “sea of mediocrity,” which is exactly what this country was not founded on and certainly doesn’t need now. We need people willing to strive for success. Instead of the government demonizing these people, they should be working to help them succeed.

So be warned state and federal governments. Don’t make the same mistakes the state I love has made.

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