New Jersey Battles over Tax on Millionaires because Legislature is Unaware that the Tax would Reduce Tax Revenue

We’ve all heard the saying that those who do not know history are doomed to repeat it.  Unfortunately for all of us, politicians who do not know history are constantly repeating history to the detriment of their constituents.  Case in point, the Democrat controlled legislature of New Jersey.

The New Jersey legislature passed a tax on millionaires that was vetoed by Governor Chris Cristie.  Now the Democrats want to override the veto to impose a 10.75 percent tax on 16,000 residents with incomes above $1 million.  The dems claim the tax would raise $673 million that the state would use to pay $1,295 to 600,000 seniors to help them – get ready for this – pay their increased property taxes.  In short, NJ wants to tax the rich to offset taxes imposed on the not so rich.  It’s also known as redistribution of income.

Alas, the Democrats in the New Jersey legislature cannot remember or refuse to acknowledge what happened in the past when New Jersey raised taxes on the rich.  Law makers live in a dream world disconnected from reality.  They pass laws based on their beliefs without regard for the consequences of the laws.  Democrats believe and have faith that they must tax the rich because it brings in more tax revenue, even when it doesn’t.  They ignore the economic facts of life.

The article called “Wealthy Fleeing Tax Happy New Jersey – $70 Billion Lost 2004 – 2008” states”

“The exodus of wealth, then, local experts and economists concluded, was a reaction to 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. . . .

“Several years ago,

[an accountant] recalled, one of his clients stood to make $60 million from stock options in a company that was being acquired by another. Before he cashed out, however, the client put his home up for sale, moved to Las Vegas, and “never stepped foot back in New Jersey again,” . . . ‘He avoided paying about $6 million in taxes,’ he said. ‘He passed away two years later and also saved a huge estate tax, so he probably saved $7 million’.”

See “Maryland Raises Tax on Rich Who Bug Out so State Collects Less Tax.”  See also “Nike Founder & Chairman Says New Tax Laws Passed by Oregonians Should be Called Oregon’s Assisted Suicide Law II,” which discusses recent state tax increases approved by Oregon voters to increase taxes on the wealthy.

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