The New Jersey Teachers Association is running a television ad asserting that Governor Christie has “given” tax cuts to “millionaires’ instead of fully funding state aid to local school districts. The ad featuring New Jersey’s Teacher of the Year is long on rhetoric and short on the facts. First, the governor cannot cut anyone’s taxes. Tax bills can be passed by the legislature and then signed by the governor. For taxes to be cut or raised both the legislative and executive branches have to agree to a change in the tax code. Neither branch of government can unilaterally raise or lower taxes.
Second, the recent Communication Workers of America radio ad makes the same assertion, namely, that the governor gave millionaires a tax cut at the expense of aid to municipalities, school districts and state programs.
Now the facts. Last year, then Governor Corzine and the Democratically controlled legislature imposed a one year tax hike on families earning $400,000 or more to help balance the budget. These rates were as follow: “For taxpayers with taxable income in excess of $400,000, 8%; on income over $400,000 but not over $500,000; 10.25% on income over $500,000 but not over $1,000,000; and 10.75% on income over $1,000,000.” The Corzine temporary tax hike sunset on December 31, 2009.
In the lame duck session the legislature could have passed an extension, which Governor Corzine said he would sign. The Democratic legislative leadership did not introduce a bill to extend the tax hike. So on January 1, 2010 the highest marginal tax rates reverted to its previous levels.
In short, both the NJEA and the CWA are proposing that only a small number of families–approximately 50,000- pay about one billion dollars in additional taxes to maintain the high level of government spending in the State of New Jersey. This is the hallmark of “legal plunder” that Fredric Bastiat asserted more than 150 years ago is the essence of an unjust society. In addition, the media blitz by the NJEA and the CWA reveals how the politics of redistribution is so entrenched in New Jersey, especially among government employees.
The recipients of government services should pay for these services just as families and individuals pay for their needs in supermarkets, department stores, gas stations, online, etc. The welfare state ideology, however, has promulgated the philosophy that citizens can–and should–receive government services, but that wealthy earners should be plundered via a progressive income to pay for most of the welfare state’s expenditures.
If families and individuals had to pay for “government services’ like they pay for basic goods and services one of two two things would happen. The cost of government would be reduced because their would not be a “golden goose” to fleece to pay the bulk of overpriced government services, or these services would be provided in the nonprofit sector or by a free enterprise firm.
Meanwhile, the debate of who pays for public education, medical care for the uninsured and other government services is mired in a fruitless discussion. If the public wants Governor Christie to close the projected $11 billion budget gap because the state’s high level of expenditures are absolutely critical to the education of children and the health and welfare of the people of New Jersey, there is a simple solution. The advocates of a $38 billion or more 2011 budget should demand they be taxed more. This is only fair. People should put their money where their mouths are and be ecstatic to pay higher taxes to support education, medical care and other government programs.