Wednesday, March 11, 2009

Jon Corzine=Robin Hood?

Like most states, New Jersey is facing big drops in revenue that will require some belt-tigthtening. So it came as no surprise when Gov. Jon Corzine announced his "draconian" budget:

Gov. Jon Corzine wants New Jersey taxpayers to shell out more to support a $29.8 billion budget that will "put our state on a stronger footing for tomorrow" while shielding the most vulnerable from the troubled economy.

Seems like a noble goal. Let's see how it plans to do it.

The governor wants to eliminate property tax rebates for all but the elderly and those making less than $75,000 per year.

Fair enough.

He wants to raises taxes on the rich and on employers.

OK, these people can probably afford it.

And he wants more from people who play the lottery, drink alcohol and smoke cigarettes.

Hmmm, not sure this one fits.

It seems to me as though this would disproportionately impact lower-income households -- those "most vulnerable" in the current economy -- making it a regressive tax. One might argue that the tax will discourage people from continuing these bad habits, but I would guess demand for these goods is rather price inelastic, and a increase in price will not deter most people from buying them. In fact, the current economic climate might make them more likely to smoke to kill stress or play the lottery* in hopes of hitting it big.

I understand "sin" taxes are probably much more politically palatable than others. And, depending on your philosophy, you might see value in using a tax to discourage certain behavior. But given the unrealistic nature of that goal, these types of taxes strike me as quite unfair and not in the spirit of what Corzine has proposed.

But don't worry, Corzine feels your pain:

"Just like the choices that a family makes around the kitchen table about its spending, the decisions I have made in laying out this budget reflect a clear ranking of my priorities and core values," Corzine said in an address interrupted 17 times for applause.

For the Corzine -- sitting around a very large kitchen table, no doubt -- it must be agonizing to make choices such as 'Should I buy that chain of private islands or spend another $62 million of my own money on a campaign?'

* I have to mention another gem from Jimmy Breslin's The Good Rat:
I do know that illegal gambling, which once was a glorius fountain of cash for the outfit, now is a government-owned lotter machine that buzzes in every newsstand and deli in the city. Years ago te state looked upon gambling as a low vice, a depravity; and those who profited from it were no better than cheap pimps and deserved years behind bars. That opinion held right up until the government took it over, at which it becaome a civic virtue to lose the rent and all other money you didn't have on rigged games of chance.

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