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TagsBY MICHAEL BUSLER
COMMENTARY
A couple of recent and very significant events occurred here in New Jersey that could lead to a national trend. New Jersey residents may be ready to revolt because of extremely high taxes. They appear ready to elect officials who promise to reduce their tax burden regardless of the consequences or even oust previously elected officials who don't quite understand their view.
In November, incumbent Gov. Jon Corzine lost his bid for re-election despite his strong philosophical ties to the popular President Barack Obama. Or maybe he lost because of those ties. Gov.-elect Chris Christie campaigned on many issues, but he consistently stated that he would not raise any taxes and, indeed, would do his best to reduce them.
Perhaps more significant was something that recently happened in Wildwood. The small seasonal community, located at the shore near the southern tip of New Jersey, recalled both its mayor and a councilman who promised to keep property taxes under control and then raised them by more than 18 percent. Wildwood's organized tax revolters said, "No more," and both elected officials were handily voted out of office.Could this be a national trend?
"Look, I am not a revolutionary," a tax revolter may say, "I am just an average hard-working guy. But I am tired of working four hours a day for the government and only four hours for my family and me. I wish there were another way. I don't like the idea of a tax revolution. I really don't. But look at it this way: I worked hard to get where I am today. And nobody ever gave me anything. Now that I am here, I don't get rewarded. What is the incentive?
"I pay more than 6 percent of my income to Social Security (actually more than 12 percent, if you count my employer's contribution), up to 10.75 percent to New Jersey for state income tax, up to 39 percent on marginal income for federal income tax and then another 3 percent to Medicare and other special payroll taxes. I then pay a 7 percent state sales tax on virtually everything I buy and the highest property taxes of any state in the union. In addition, I pay special hidden taxes on gasoline, liquor and cigarettes. And with this new health-care plan about to pass, my taxes will rise even more. Meanwhile, my wife and kids just don't seem to have what a person with my income should provide. What do you expect me to do?"
Interesting view. It appears as if the majority of the people in Wildwood, and maybe in all of New Jersey, have said, "No more." They are saying they want to keep the money they worked hard to get in their own pockets, where it belongs. So they are prepared to revolt if they have to.
They claim that their actions are fair. The government, they note, is in business essentially for two reasons. One is to provide certain basic services such as leadership, defense, a legal system, etc. (Economists refer to these as public goods.) The second is to redistribute income from those who have earned "plenty" to those who, for whatever reason, have earned little or nothing.
Nobody would argue the need (or value) for the first reason. However, paying government employees salaries and wages that significantly exceed those paid in the private sector is not necessary. Also, offering pension plans that allow a person to work for 20 years and collect a full pension for the next 40 is also not necessary.
What is needed to provide public goods is an efficient system with reasonably priced labor that provides just the basic government services. History indicates that the private sector, properly regulated, is much more efficient and cost-effective than the government.
And how about those truly needy? In our system, a person is paid according to the value of his or her output. The more a person contributes, the more he or she is paid. That means if, for whatever reason, an individual does not contribute anything, he or she would be paid nothing. We know it is true that some people live under difficult circumstances. Luckily, the more fortunate, who are compassionate, are willing to give a little to help. But is this help going a bit too far?
The tax revolution could spread nationwide, from the local level all the way to the federal level. That could be the way the majority wants it. And in our system, that's the way it will be. And to think that this potential national movement started right here in tiny Wildwood, N.J.
Michael Busler is an associate professor and a fellow at the William J. Hughes Center for Public Policy at Richard Stockton College.
