From the APP:
Don’t blame NJ’s high taxes on ‘Moocher states’: Malanga
Last year’s federal tax reform act has prompted a lot of hand wringing and hyperbolic language from New Jersey officials over the loss of the state and local tax deduction. Rep. Josh Gottheimer, D-N.J., has advocated for a scheme to help some residents maintain their deductions by calling local taxes charitable deductions. (“GOP tax plan: N.J. pushing back,” March 5.)
The state needs to pursue this strategy, Gottheimer contends, because we’re tired of picking up the tab for “Moocher states” that, according to him, take our handouts and steal our taxes.
…
Regardless of whether the plans are ruled legitimate, however, the larger question is whether New Jersey taxpayers are really subsidizing a bunch of “moochers” from around the rest of the country. The congressman’s notion is based on studies pioneered by the late Sen. Daniel Patrick Moynihan, which show that the flow of funds from Washington to the state exceeds the money that New Jersey residents send to Washington as taxes.Meanwhile, other states receive more back than they send. That underlies the idea that the federal government is shortchanging New Jersey. But when you look at what kinds of federal spending these studies track, you realize that the deficit New Jersey experiences is as much a function of the state’s own shortcomings as it is of any unfair treatment from Washington.
In these studies, the largest area of money tracked from Washington to the states is federal retirement income, three-quarters of which is Social Security payments to retirees. This is not discretionary income that the federal government is choosing to send to the states. It is money going to retirees where they now live. Jersey does not get a significant per capita share of this money because so many people leave the state when they retire. Even state workers flee in great numbers. A 2014 study found that nearly 25 percent of public employees leave New Jersey when they retire. That’s hardly the rest of the country’s fault.
While some retirees leave for the good weather elsewhere, many go because of the high taxes that help consistently get Jersey ranked as one of the worst places in which to retire. Moderate-income residents leave because they can’t afford to pay taxes on their homes once they retire. Wealthier residents leave because they don’t want to see their wealth whittled by the state’s high inheritance taxes. A recent survey by the New Jersey Business and Industry Association, for instance, found that 40 percent of business owners plan to leave the state when they retire.
Another significant area of Washington spending is federal contracting, a big chunk of which is defense spending. This is money competitively bid out to individual companies. And New Jersey firms do especially poorly at winning federal contracts. Our take from the $400 billion federal contracting pie is well below the national average when measured on a per capita basis. That clearly hurts the state’s economy, but is anyone asking why the state does so poorly? Is there something fundamentally uncompetitive about the New Jersey economy? Perhaps that’s the kind of thing the congressional delegation and our representatives in Trenton ought to be investigating. Among other things they would find is that any defense industry the state once boasted has long ago disappeared.
When he was alive, Sen. Moynihan understood that the flow of funds between Washington and the states was complicated and not something easily changed. In an essay attached to the 1999 study, he decided the only way to address the issue was to dramatically pare back the federal government’s taxes and spending, leaving the money in the states, where local governments could then decide how to use it.
Ironically, the new federal tax cuts accomplish some of that. The corporate tax reduction, for instance, will leave billions of dollars that would otherwise go to Washington in the hands of New Jersey businesses, where they could potentially spend it. The only problem is that Jersey isn’t a place where many of them want to continue doing business. The recent New Jersey Business and Industry Association survey found only 14 percent of local firms said they planned to grow further here. By contrast, 29 percent said they are looking to expand elsewhere.
“I guess I am destined to be attacked as a tax heretic and shunned as a non-believer by the high economic priests of low tax policy. My problem is that I can’t believe in that which I know not to be true. Lower and lower taxes aren’t necessarily pro-growth any more than higher taxes always result in more revenue. Unlike religion, the belief in low tax rates shouldn’t be absolute. Belief in low tax rates should be based on facts, not on the neo-classical economic faith.”
https://www.forbes.com/sites/greatspeculations/2012/12/05/how-i-know-higher-taxes-would-be-good-for-the-economy/
“”In another example, I know a former co-worker who earned enough from his Wall Street job to “retire” and now works part time managing his family’s investments. Low capital gains tax rates and low tax rates on dividends and interest allow him to support his family without taking very much investment risk or having to work at a full time job. He can “make his nut” by holding low-risk government bonds. When asked what would happen if taxes on investment earnings were increased, my friend first cursed out President Obama and then said that he would either have to find a “real job” or would have to figure out to make more money from his investments, inevitably by taking more risk. In this case, low tax rates are creating a disincentive to take on investment risk and is allowing my friend to play golf rather than return to the work force.
Economists who push low-tax rates often ignore the real-life things that are important to taxpayers and why people work–lifestyle and financial security, and instead focus on the theoretical marginal tax burden of the last dollar earned without thinking about its marginal utility.
Real people work so that they pay for “stuff for their family”. When they have enough stuff they stop working as hard because the next dollar earned isn’t as valuable as the first dollar earned. Low tax rates make it easier to get to the point of diminishing marginal utility from extra work and incremental investment risk.
Of course, tax rates that are too high aren’t good either. Too high tax rates are an economic killer because they create a confiscatory feeling that kills off any incentive for work, gain or risk. Current tax rates, or the tax rates of the Clinton administration, aren’t anywhere near confiscatory.””
“Over the last decade, states with the highest top tax rates saw their economies grow by 25.8% on a per-person basis, while those states without income taxes saw growth of just 17.4%. This growth isn’t just about numbers in a spreadsheet or bragging rights. It has translated into an improved quality of life for the residents of states with higher income tax rates. Over this same period, residents of those states saw more rapid growth in take-home pay (disposable personal income per person) and their job prospects, as measured by the official unemployment rate and the ratio of people in their prime working years who have managed to land a job.”
http://fortune.com/2017/10/27/state-income-tax-reform-2017-trump/
“”To be clear, these types of cross-state comparisons don’t prove that higher income taxes are causing faster growth in the states that have embraced them. But they do cast serious doubt on claims that lowering income taxes is a surefire way to grow the economy.
To hear many lawmakers tell it, nothing is more important than lowering taxes on our nation’s wealthiest “job creators.” But the nine states without income taxes, despite having lower overall tax rates on the wealthy than any of the nation’s other 41 states, are not the shining example of economic success that this line of argument suggests.
Lowering personal income taxes or forgoing such taxes entirely requires difficult tradeoffs that can come at a high cost to the economy. The states without income taxes, for instance, tend to invest less in education—a direct consequence of the low-tax approach that threatens the long-run quality of these states’ workforces.
States without income taxes also tend to rely more heavily on sales and excise taxes, which fall disproportionately on moderate-income families. Balancing the budget on the backs of families who lack a stable financial footing is unsustainable in the long run, and it runs the risk of dampening consumer spending that fuels so much of our nation’s economy.
While some lawmakers are concerned about how their highest-income residents might respond to having to pay a higher tax on their incomes, the reality is that this group isn’t nearly as sensitive to tax policy changes as is often claimed. Wealthy individuals don’t stop working or investing simply because they are required to pay an income tax.
If lightening the tax load for those at the top were key to economic success, then states without income taxes would be trouncing the rest of the country—most of all those states with the highest top tax rates. Instead, these states’ economies are underperforming.””
Pumpkin jizz Saturday. Everybody put on your ponchos.
This really hits the nail on the head.
“If lightening the tax load for those at the top were key to economic success, then states without income taxes would be trouncing the rest of the country—most of all those states with the highest top tax rates. Instead, these states’ economies are underperforming.”
Just in time. I almost got splooged.
Expat doesn’t like to hear the other side of the argument. If low taxes are the key to economic growth, why is every high tax state destroying the low tax states? Someone has to ask this question. Clearly, if low taxes were the key to economic growth, these states would all be destroying the high cost states, but it’s the opposite now why? These are serious questions we should be asking.
Wife’s mouth must be out of order.
I was just thinking about this quote below. You know why law makers push this idea…they are bought by the rich. So they are not doing what’s good for the entire economy, but only what’s good for the top. Lower their taxes (on the backs of everyone else) so that they get to keep more of their money, resulting in less hard work and less risky investments that are needed for the economy to grow. They no longer do their job to increase wealth in the economy, instead they become complacent as they took the easy way out to profit on the backs of the rest of the country.
We have been played ladies and gents.
“To hear many lawmakers tell it, nothing is more important than lowering taxes on our nation’s wealthiest “job creators.” But the nine states without income taxes, despite having lower overall tax rates on the wealthy than any of the nation’s other 41 states, are not the shining example of economic success that this line of argument suggests.”
Look at the low tax states which let the rich keep most of their money. Their economy sucks because the rich don’t work as hard at creating wealth. They become lazy and complacent with their money. The tax environment allows them to do this. You have to dangle the carrot.
Everyone should work hard, this is why allowing massive wealth with ultra low taxes is a horrible idea. You just took away the incentive for the largest holders of capital to risk their capital on new investments. So the economy stagnates without risky investment that is needed to grow the economy.
Maybe next week BJ Pumps will have his marital jizz receptacle back in working order.
Think about it. Put yourself in the shoes of someone worth a crazy amount of money like 500 million. If you have low taxes, are you really going to take on risky investments that if successful will grow the economy? Hell no. You are trying to take the least amount of risk so that you don’t lose any money, just maintain it or a grow it a little. This is why large sums of wealth should be outlawed for the greater good. It just hurts economic growth. No wonder we saw immense stagnation in an era of huge inequality across the globe.
Sploosh, Splash, leaving now before it gets higher than my Goretex high tops.
Expat, so smart. Bashes the individual as opposed to the ideas of the argument. Debate me, and stop acting like a child.
I’m calling you and others out on your low tax economic theory. If it’s so correct, how are the high tax states destroying the low cost states in terms of economics. All you and others do is bash high tax states like Ny, Cali, and Nj. Their economies are strong, yet you take up the call that they need to reduce taxes, their economies are not doing well. I call bs.
We cry about the millionaires tax, that they will leave. Why are these people so greedy. If you made a million dollars in a given year(the tax applies to anything made over a million), give back some to the other economic participants in the form of infrastructure and education investment for the greater good. Why is this a bad thing? God forbid you pay 12% income tax on anything made over a million. You just made a ton of money that most wont even see in their lifetime. Will it hurt you? Not at all, you will be fine. You will also benefit from said investments in infrastructure and education. So stop thinking this is a zero sum game and that the govt is just robbing the rich through taxes. It’s a lame argument.
https://www.godaddy.com/dpp/find?checkAvail=1&tmskey=&domainToCheck=pumkinjizz.com
Didn’t expect you to have a response and if you did, it would be some stupid ignorant crap like taxes are a form of theft. Lower the better.
“”In another example, I know a former co-worker who earned enough from his Wall Street job to “retire” and now works part time managing his family’s investments. Low capital gains tax rates and low tax rates on dividends and interest allow him to support his family without taking very much investment risk or having to work at a full time job. He can “make his nut” by holding low-risk government bonds. When asked what would happen if taxes on investment earnings were increased, my friend first cursed out President Obama and then said that he would either have to find a “real job” or would have to figure out to make more money from his investments, inevitably by taking more risk. In this case, low tax rates are creating a disincentive to take on investment risk and is allowing my friend to play golf rather than return to the work force.
Economists who push low-tax rates often ignore the real-life things that are important to taxpayers and why people work–lifestyle and financial security, and instead focus on the theoretical marginal tax burden of the last dollar earned without thinking about its marginal utility.”
“Real people work so that they pay for “stuff for their family”. When they have enough stuff they stop working as hard because the next dollar earned isn’t as valuable as the first dollar earned. Low tax rates make it easier to get to the point of diminishing marginal utility from extra work and incremental investment risk.
Of course, tax rates that are too high aren’t good either. Too high tax rates are an economic killer because they create a confiscatory feeling that kills off any incentive for work, gain or risk. Current tax rates, or the tax rates of the Clinton administration, aren’t anywhere near confiscatory.””
“Real people work so that they pay for “stuff for their family”. When they have enough stuff they stop working as hard because the next dollar earned isn’t as valuable as the first dollar earned. Low tax rates make it easier to get to the point of diminishing marginal utility from extra work and incremental investment risk.
Of course, tax rates that are too high aren’t good either. Too high tax rates are an economic killer because they create a confiscatory feeling that kills off any incent!ve for work, gain or risk. Current tax rates, or the tax rates of the Cl!nton adm!nistration, aren’t anywhere near confiscatory.””
Jeez. At this time, about 10:20 am, I have decided only about 10 sentences in this blog were worth reading. My speed reading abilities allowed me to spend about 14 seconds of my time by skipping the drivel. Onto more important matters! signing off
Pumps is the founder and sole member of the “Double our Property Taxes Now!!” club.
On the original topic. So the reason that NJ doesn’t get as much federal money is that it’s high costs and taxes lead citizens to flee in retirement.
Another thought. It’s hypocritical to complain about NJ “subsidizing” other states via tax redistribution while applauding the state of NJ forcing Short Hills residents to subsidize Patterson with their taxes. Are you in favor of redistribution or not? I’m not, so want less taxes, less govt spending.
That’s another corundrum the lefties in this state get wrap their heads around. They are against welfare when it’s handed out to a red state, but not a blue city. I have some friends that are left leaning on issues like healthcare. But most of them are reasonable people and not hypocritical. Now, don’t get me wrong, there are plenty of people on the right that are equally hypocritical on different issues. The difference is, the hypocrites on that side don’t claim to be keepers of intellectualism while failing to acknowledge their own illogical belief structure.
No One,
You are absolutely right. I’m not for redistribution. Thanks for simply pointing out why my argument is a terrible idea. You truly are a man of logic.
lol, fake news cnn is now following the storm Daniels gentleman club tour. Trying to rebuild their journalistic reputation I guess.
the reason that NJ doesn’t get as much federal money is that it’s high costs and taxes lead citizens to flee in retirement.
Yes. And to make the point in another way, the States get very little federal money because the majority of it is tied to individuals. Any ‘study’ aggregating all of it by States is being disingenuous at best.
Warning
does not fit narrative
must suppress
IDEAS THE SATURDAY ESSAY
The Truth About the SAT and ACT
Myths abound about standardized tests, but the research is clear: They provide an invaluable measure of how students are likely to perform in college and beyond
For stu:
https://www.youtube.com/watch?v=mHmBmBUJbkU
“only about 10 sentences in this blog were worth reading”
Just skip the posts (unfortunately the majority of total) by one participant.
Sad, I still appreciate the old-timers here but it has become unreadable with him. I only punch in every couple days now. Enjoy a clear weekend everyone, and hopefully Tuesday’s storm tracks East.
Chi, Go Big Red!
Looking at an impromptu trip to LP next weekend if I can wrap in Whiteface.
Stu, watch the selections for the Regionals coming up this weekend. Chances are Cornell, Penn State, and Michigan (with a fourth tbd) will face off in Allentown with the winner going to the Frozen Four. A lot of interesting back stories among that group and it will be some great hockey. Only an hour away, and a great deal.
Warning
does not fit narrative
must suppress
https://nypost.com/2018/03/10/cutting-welfare-to-illegal-aliens-would-pay-for-trumps-wall/
I was looking at Allentown, but that is the Midwest regional……. wouldn’t it be more likely that they play in Bridegeport? What is the rationale?
leftwing says:
March 11, 2018 at 9:45 am
Chi, Go Big Red!
Looking at an impromptu trip to LP next weekend if I can wrap in Whiteface.
Stu, watch the selections for the Regionals coming up this weekend. Chances are Cornell, Penn State, and Michigan (with a fourth tbd) will face off in Allentown with the winner going to the Frozen Four. A lot of interesting back stories among that group and it will be some great hockey. Only an hour away, and a great deal.
Wishful thinking maybe. There is a way over the top analysis at uscho website under bracketology that updates with results. They have Cornell in Bridgeport. Frozen four is funky since they will adjust location for fan attendance, to avoid intra conference matchup, and gate. If they end up in Bridgeport may have to take my guy on an overnight ‘college visit’ that way lol.
I bet Rick Perry sits in Cabinet meetings and thinks “Thank God there is someone dumber than me in here!”
https://twitter.com/axios/status/972996794757140486
Just Remember: https://youtu.be/Xe_KwZh9wiE?t=22s
5:35. Fair enough. What F’ing “narrative” numbnuts.?
Serious question? Do you know any immigrants? Ever met a DACA Kid? These are by and large hardworking family oriented people who fled a shitshow in Mexico. I’m all for letting them stand on their own two feet. But they are “here” deporting 7M people is a fools charade. It’s bullshite…..he’s posturing for a bunch of people that are letting hatred and malcontentment get in the way of whatever tiny shred of judgment they picked up on the TV.