Some more cheerful news from New Jersey in the battle over the budget and taxes as Democrats in the Assembly failed to override Governor Chris Christie's veto of a proposed tax increase on income more than $1 million. The 47 to 33 vote for the bill did not give the Democrats the two-thirds majority needed to override it. Furthermore, because the bill originated and failed in the Assembly, the Senate will not consider it.
Christie famously vetoed this proposal some two minutes after the Senate passed the bill back in May. The proposal would have siphoned an estimated $600 million more out of New Jersey's economy by increasing the income tax rate by nearly 2 percent (8.97 percent to 10.75 percent) on the state's 16,000 highest wage earners. Senate President Stephen Sweeney and other Democrats claimed to be fighting for seniors and the disabled, saying they wanted the extra money used to restore property tax rebates and for other programs.
However, real world experience shows that excessive tax rates, especially on high income earners, merely stifles economic activityand growth and chases people out to more tax friendly states. This leaves a depleted tax base that is forced to foot the bill of newly created programs. New Jersey has experienced this first hand over the last five years as thousands of taxpayers have moved out, leaving the state with a net loss of $9 billion in taxable income. This doesn't help seniors and the disabled. New Jersey residents have been plagued with ever increasing taxes as the state budget has grown from $13 billion in 1991 to over $30 billion today.
Photo credit: Hoboken Condos