NJ Flat Tax?

5/29/2009:

Haven’t had much time to delve into the Gubernatorial race in NJ (Primary is next week – FYI) – but one subject that has come up – is a Flat Tax – from Candidate Steve Lonegan.

Frankly, I believe a flat tax across the board (Federally too) would be a godsend. No more trickery, millions of pages of tax code – just a straightforward process. Whether or not we have it at the state level is of little importance to me as an individual – until we have it on the national level – it may be a waste of time, no?

Bogota Mayor suggests scrapping the graduated tax

nj-gubernatorial-candidate-steve-lonegan-supports-a-flat-tax-rate(from the Wall Street Journal)

“If ever a state were ripe for bold economic reform, it would be New Jersey, which is shedding jobs and is in perennial budget crisis despite one of the highest tax burdens in the land. So why is Chris Christie, the GOP front-runner in the state’s 2009 gubernatorial race, taking cheap shots at the flat tax?

Mr. Christie is a former U.S. attorney who did yeoman work putting away the state’s many political thieves. But he seems to be running scared in next month’s Republican primary, when he faces former Mayor of Bogota Steve Lonegan, who is proposing to scrap Jersey’s job-killing graduated income tax that has rates running from 1.4% to 8.97%. Mr. Lonegan wants to replace it with a 2.98% flat tax on the first dollar of income earned.

That’s a good idea that would give the Garden State the lowest tax rate in the Northeast after New Hampshire. Mr. Lonegan says this will ensure that when New Jersey incomes “move-up,” the residents “don’t move out.” Over the past decade, New Jersey has suffered the fourth highest rate of out-migration of all the states, with nearly half a million residents fleeing to the likes of Delaware, Florida and even New York.

Mr. Christie is assailing Mr. Lonegan’s proposal on TV, radio and the Internet as a tax hike on the poor. His TV ad claims the flat tax isn’t fair because it would raise taxes on “almost 70% of working families.” That sounds like he’s reading from President Obama’s teleprompter. Mr. Lonegan counters that only 40% would pay more — by an average of less than $300 for a family earning $20,000 — and their tax liability would still be lower than in New York and Pennsylvania. The average New Jersey family’s tax bill would fall by $1,000 a year.

Whether a flat tax that modestly raises the tax payments of some Americans will fly politically is hard to know. The state and federal tax code are so laced with tax credits and exemptions that any base-broadening, rate-cutting reform is bound to raise taxes on someone. Our friend Steve Forbes, a New Jersey resident, believes that a flat tax that “cuts taxes for everyone” is the way to go. Mr. Lonegan counters that every working New Jersey resident should pay something — on the principle that everyone should bear at least some of the cost of government.

The larger point is that either reform would be far better than the current tax code for New Jersey’s poor, who suffer the most from the state’s high rates that drive jobs and capital elsewhere. A flat tax would help all income groups by attracting those resources back to the state. Surely Mr. Christie realizes that.

Both GOP candidates agree that the 103 tax increases, including income and sales tax rate hikes, under current Governor Jon Corzine and his predecessor, the disgraced Jim McGreevey, have done great harm to their state. From 2001 to 2008, New Jersey lost a net 25,000 private-sector jobs even as public employment grew by 65,000 workers. The state’s finances are such a mess that in late 2007 Governor Corzine proposed the political “Hail Mary” of mortgaging New Jersey’s toll roads in return for a guaranteed revenue stream. He lost, thanks to opposition led by Mr. Lonegan.

If he wins the primary, Mr. Christie will need his own tax reform agenda, both to defeat Mr. Corzine and win a mandate for changing the corrupt mess that is Trenton. Mr. Christie should understand that a flatter tax is an economic and anticorruption strategy because it limits the opportunity for political mediation on behalf of special interests. Republicans can’t credibly be the candidates of growth if they echo liberal class-envy rhetoric to attack tax reform.”

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12 Comments on "NJ Flat Tax?"

Easy-E
Member

OOOh Rudy “9/11” was in town! Wow!

Did you know he was mayor of NYC during 9/11?

9/11!

Red Haven
Member
Red Haven

Anyone else see Lonegan at the PATH this morning? He wasn’t exactly mobbed with well wishers. Christie and Giuliani did much better at The Malibu the other day.

matt_72
Member

We love Christie, 130 convictions/guilty pleas & not one lost case. Wish he would move to Hoboken.

In response to Red Haven who said:
Anyone else see Lonegan at the PATH this morning? He wasn’t exactly mobbed with well wishers. Christie and Giuliani did much better at The Malibu the other day.

bnr4real
Member
bnr4real

Probably because no one knows who these people are! Giuliani is a nationally recognized face.

In response to Red Haven who said:
Anyone else see Lonegan at the PATH this morning? He wasn’t exactly mobbed with well wishers. Christie and Giuliani did much better at The Malibu the other day.

bnr4real
Member
bnr4real

Isn’t a flat tax the kind that penalizes lower incomes and benefits higher incomes?

samuel charles
Member
samuel charles

NJ Flat Tax ????
It’s already here and has been for years..
That’s why it’s called “Gross Income Tax”.
Any person with half a brain knows this..No deductions are allowed except for a few,i.e medical subject to floor..
NO deductions for interest,taxes,contrib, nor losses on stock sales..So who is kidding who ?
As to Flat Tax for Federal, I see this as never,ever happening. Every lobbyist from Charitable Orgs. as well as Banks,Mtg Brokers would be livid.
Take away deductions such as mtg int and re taxes,,,SURE THAT WOULD REALLY GIVE THE ECONOMY A JUMP START????
Any suggestion for a flat tax by any politician shows to me a clear sign of STUPIDITY!!!!

YipYap
Member

Lonegan’s plan is just another version of trickle down economics, lower the levy on the rich and the corporations and “hope” they spend it here in NJ.

Lonegan is now running on a conservative pipe dream, since those days are now long gone where the State could balance it’s budget without one shot tricks and putting off the unfunded liabilities. He wants to dismantle the state’s income tax brackets and replace them with a flat rate of 2.9 percent, essentially rolling them back to their original levels from the mid 1970s. His plan would raise taxes on low and middle income residents who currently pay very little or no state income taxes at all. There is no way that a democratic controlled NJ Legislature in New Jersey will let that happen.

If anything there will be more taxes at all levels of government. The Washington Post ran a story last week about the Federal Government looking into adding a Federal VAT taxes to help make up for the 60 trillion in unfunded liabilities and the enormous deficit.

washingtonpost.com/wp-dyn/content/a...cle/2009/05/26/AR2009052602909.html

Whatever happens in this election we can no longer afford status quo, and whomever wins will have some very tough choices to make and they will have to make them because there will be no bailouts for the state governments from the Obama administration.

strand tramp
Member
strand tramp
i guess the ever iincreasiing levy on the rich has been working well????? NJ is one of the few states to see a population decline in recent years. given the barrage of incoming legal aliens that is one huge exodus by existing residents!! add in the uncounted millions of illegals and you can easily see why this welfare state is bankrupt. BTW, how have tax recipts been doing since mr corzine hiked every tax in the state? face it all you little soc1alists, there is a limit to how many benefits you can give to a population that can’t pay for them. “yeah, you don’t work so…no, you cannot have a 50″ LCD flat screen with 200 HD channels.” In response to YipYap who said: Lonegan’s plan is just another version of trickle down economics, lower the levy on the rich and the corporations and “hope” they spend it here in NJ. Lonegan is now running on a conservative pipe dream, since those days are now long gone where the State could balance it’s budget without one shot tricks and putting off the unfunded liabilities. He wants to dismantle the state’s income tax brackets and replace them with a flat rate of 2.9 percent, essentially rolling them back to their original levels from the mid 1970s. His plan would raise taxes on low and middle income residents who currently pay very little or no state income taxes at all. There is no way that a democratic controlled NJ Legislature in… Read more »
matt_72
Member
A better plan would be to just cut spending. If they can cut spending enough for a tax cut, great. My guess is they can’t because of the economy & massively underfunded budget (and pensions). But spending & benefit cuts now will result in fewer tax hikes later. In response to YipYap who said: Lonegan’s plan is just another version of trickle down economics, lower the levy on the rich and the corporations and “hope” they spend it here in NJ. Lonegan is now running on a conservative pipe dream, since those days are now long gone where the State could balance it’s budget without one shot tricks and putting off the unfunded liabilities. He wants to dismantle the state’s income tax brackets and replace them with a flat rate of 2.9 percent, essentially rolling them back to their original levels from the mid 1970s. His plan would raise taxes on low and middle income residents who currently pay very little or no state income taxes at all. There is no way that a democratic controlled NJ Legislature in New Jersey will let that happen. If anything there will be more taxes at all levels of government. The Washington Post ran a story last week about the Federal Government looking into adding a Federal VAT taxes to help make up for the 60 trillion in unfunded liabilities and the enormous deficit. washingtonpost.com/wp-dyn/content/a...cle/2009/05/26/AR2009052602909.html Whatever happens in this election we can no longer afford status quo, and whomever wins will have some… Read more »
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