"What does not change / is the will to change"
--Charles Olson, "The Kingfishers"

Thursday, February 4, 2010

Driving the rich away

I have my doubts about this study -- not its findings or methodology, but the political bias it plays into.

Commissioned by the state Chamber of Commerce and conducted by a Boston College institute -- the Center for Wealth and Philanthropy -- that has endorsed a repeal of the estate tax, the study has found that rich folks are leaving the state and taking their money with them. The reason for this "exodus of wealth," according to "local experts and economists," was
a series of changes in the state’s tax structure — including increases in the income, sales, property and “millionaire” taxes.

“This study makes it crystal clear that New Jersey’s tax policies are resulting in a significant decline in the state’s wealth,” said Dennis Bone, chairman of the New Jersey Chamber of Commerce and president of Verizon New Jersey.
So who are these experts The Star-Ledger is quoting? Well, there is the Chamber, of course, and Jim Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, and a certified public accountant that offers some anecdotal evidence. Not exactly an exhaustive attempt to get past the what of the so-called wealth transfer to the why. The Chamber, as we know, has a political agenda (profit, profit and more profit), while our accountant friend offers a nice touch but not much in the way of real empirical evidence.

As for Hughes, he is an important researcher and academic, he also has a tendency to speak in a pro-business, pro-developer language that has always left me wondering how much of his analysis is tinged with a pro-corporate bias.

So, you'll have to excuse my skepticism when reading this report. I'm having trouble buying it.

8 comments:

Matthew Brian said...

Agreed.

reinkefj said...

Well as soon as the last of the old relatives pass, I'm out of here. I'm not "rich", but if I hang around NJ as it's current;y constructed tax-wise, I sure won't be. Just slowly going broke, here in the Pepuls Republik of Nu Jerzee!

Anonymous said...

It's bogus as usual. The NYTimes debunked a recent Rutgers study that alleged that NJ was losing people. The NYTimes pointed out that it was a flawed study because it left out immigration and the prolific NJ birthrate. It turns out, that NJ is gaining in population and more people are moving into NJ than are leaving. And in fact, young affluent yuppie types are moving into NJ because NJ's ace in the hole is its location, location, location, its good schools and it's cheaper than NY. The rate of growth in population has slowed a bit but NJ is still gaining in population. If anything, NJ businesses don't pay enough in taxes. Many NJ businesses are getting tax abatements long after any reason for them has expired. And these developers with their wonderful tax abatements can contribute to the campaigns of city council members who granted them the tax abatements and continue to give them abatements long after the demonstrated need has expired.
Businesses are still moving into NJ because of its location and because of those wonderful tax abatements and other tax holidays for the rich and powerful.

Anonymous said...

In 2008, NJ had the highest percentage of millionaires, I don't know what it is for 2010 but I'm guessing it's still at the top or near the top.

By Claire Heininger/Statehouse Bureau
January 10, 2008, 6:22PM
New Jersey has the most millionaire households in the country, according to a marketing company's fifth annual ranking.

The Garden State moved up from No. 2 in 2005 and 2006 to No. 1 last year on the index, compiled by Phoenix Affluent Marketing Service, which does research for companies that sell luxury products, investments and the like to the wealthy.

According to the service, in 2007, 7.12 percent of New Jersey's 3.2 million households had a total of $1 million or more liquid or investable assets. That includes items such as savings, stocks and bonds, precious metals, the cash value of certain life insurance policies and retirement accounts not controlled by employers, but not equity in homes.

In 2006, 6.46 percent of New Jersey households met the $1 million standard. The figure was 5.89 percent in 2005. Hawaii ranked first in both those years, but fell to fourth in 2007. Maryland was second last year and Connecticut was third.

The survey rankings are based on Census data and online surveys of thousands of affluent households.

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Anonymous said...

The goal of all these pro-corporate studies is to promulgate the notion that we should reduce taxes on businesses and corporations because it will create jobs. In other words, it's more of the trickle down BS crapola that worked so well during the Bush years (sarcasm alert). These right wingers and fascists just never quit spouting and propagandizing for this feculent pseudo-philosophy that cutting taxes for the rich and for the businesses will somehow create jobs and attract more businesses. It did not work in the past and it will not work now or in the future.

reinkefj said...

Dear Anonymous:

>we should reduce taxes on businesses and corporations because it will create jobs.

Help me understand something: A business sells "stuff". It adds up all its costs, tacks on some profit, and people but that "stuff". A corporate tax is just ANOTHER cost. The business actually EITHER passes it along to the consumer OR goes out of business.

Right?

(Ignore for the moment that if it reduces its obscene profit to cover the tax so as not to pass it along. It still is passing that tax along by accepting a lower profit.)

So, we should have a ZERO corporate tax for NO OTHER REASON than it conceals exactly how much we are paying in taxes.

ONLY REAL PEOPLE PAY TAXES.

Jobs have nothing to do with it! Honesty does.

If I buy a can of beans, I have NO way of knowing how much "tax" I am paying in the price of that can of beans.

On April 15th, the tax I paid on that can of beans isn't in what I pay as "my taxes". It's hidden.

I think if people knew what they were paying, really and truly, bottom line number, there would be a GIANT revolt. Make the Tea Parites of last summer look like a gardent tea party.

It's actually much worse than we can intuit. When a company makes a capital good that other companies use to make "stuff" we have taxes on top of taxes being hidden. Buried hip deep in obfuscation.

And the congresscritters like it just that way. Keep the rubes dumb about what they are actually paying for this class of a "new priesthood" in the District of Corruption and other "capitols"!

Argh!

Anonymous said...

Corporations should pay their fair share of taxes because they are using the commons: roads, bridges, the whole infrastructure, the police, the fire departments, first aid and rescue squads, the judicial/court system, the sewer system, the water system. They can have a huge impact on the environment, the soil, air, water. Will they clean up after themselves or leave the tax payer with the bill for the clean up of toxic waste dumps? Often municipalities have to take these corporations to court over clean up of their messes they leave behind. Who pays for these court costs? The tax payer is on the hook for a good chink of these costs because some corporation was a bad neighbor.