New Jersey budget crisis after 1 taxpayer moves. Is the problem high taxes or wealth disparity?

[Deleted member 429137]

http://mobile.nytimes.com/2016/05/0...sheadlines&emc=edit_th_20160501&_r=1&referer=

Our top-heavy economy has come to this: One man can move out of New Jersey and put the entire state budget at risk. Other states are facing similar situations as a greater share of income — and tax revenue — becomes concentrated in the hands of a few.

Last month, during a routine review of New Jersey’s finances, one could sense the alarm. The state’s wealthiest resident had reportedly “shifted his personal and business domicile to another state,” Frank W. Haines III, New Jersey’s legislative budget and finance officer, told a State Senate committee. If the news were true, New Jersey would lose so much in tax revenue that “we may be facing an unusual degree of income tax forecast risk,” Mr. Haines said.

Beyond the debate on taxing the rich, Mr. Tepper’s move is a case study in how tax collections are affected when income becomes very highly concentrated. With the top tenth of 1 percent of the population reaping the largest income gains, states with the highest tax rates on the rich are growing increasingly dependent on a smaller group of superearners for tax revenue.

I'm interested in hearing people's suggestions on how to solve this problem. Do you see it as a taxation problem or an income inequality problem?

 

[Skip Reming]

http://mobile.nytimes.com/2016/05/0...sheadlines&emc=edit_th_20160501&_r=1&referer=





I'm interested in hearing people's suggestions on how to solve this problem. Do you see it as a taxation problem or an income problem?

"the rich don't pay taxes" - Bernie

 

[Deleted member 429137]

"the rich don't pay taxes" - Bernie

What's going on? The real Skip Reming doens't play mindless pasting games with rhetoric; he's a hard-hitting poster that brings the intellectual fire with facts and sources. Who are you?

 

[ripskater]

New Jersey has a spending problem and has high tax rates. That's probably one reason why the rich move from there to Florida. Some states have low taxes and they get along just fine.

 

[HunterSdVa29]

New Jersey has a spending problem and has high tax rates. That's probably one reason why the rich move from there to Florida. Some states have low taxes and they get along just fine.

well weather clearly has to do w/ that as well.

California has the highest state tax in the US< yet we have no problem attracting rich cats, atlhetes, and entertainers to our area. FFS Cyndi Lauper owns a house like ten miles from me, and I live in Hills Have Eyes territory (seriously, they filmed part II out here)

 

[phipps66]

Taxes the rich pay are the grease of the wheels of Gov.

 

[Primitivo]

Wait... what?

 

[12ga.]

Cant it be both? Like if more people made more you wound not have to tax rich so much to pay for things and could spread tax burden around more? Like if people made more there would also be less things to pay for like public assistance?

 

[Deleted member 429137]

Cant it be both? Like if more people made more you wound not have to tax rich so much to pay for things and could spread tax burden around more? Like if people made more there would also be less things to pay for like public assistance?

I like this thought. But the problem here is that if non-rich made more money, the rich would make less money and they would probably support that idea even less than high taxes because you can't hide money you don't make in the first place.

 

[Cubo de Sangre]

I'm not convinced there's a problem.

 

[Bloodworth]

There are too many people using taxed based services and not putting back in. All comes down to illegals. They are a large work force, avoid taxes and send money out of the state, out of the country.

Schools have 6 kids in a classroom who have parent paying school tax.

Cops babysit areas who have more people using taxes then paying property tax, like 3 families in a 1 family home

 

[panamaican]

It's a little bit of both and probably a bigger problem in small states than in large ones.

In some ways, state taxes are anachronistic. With the modern ability to move capital easily across borders, the wealthy can engage in forum shopping for the best local tax climate and designate that as their "legal" abode while continuing to physically reside wherever they wish. You see it all of the time with athletes who chose Florida or Texas or somewhere else as their residence while playing professional sports in some other state.

My suggested solutions are going all in or all out. Eliminate state income taxes completely and run everything through the fed. Or switch to state taxes that are based on physical presence, like consumption taxes. And we're not going to reverse income consolidation so we need to be more creative with our tax revenue while reducing our reliance on it. Nor will lowering taxes do anything. So long as any state has a 0% rate, the other states will always be engaged in a race to a bottom.

The honest solution is to acknowledge that states need to bend the knee to their wealthy residents and give them whatever it takes to keep them in the fold. But I doubt that's a palatable option.

 

[TheStruggle]

well weather clearly has to do w/ that as well.

California has the highest state tax in the US< yet we have no problem attracting rich cats, atlhetes, and entertainers to our area. FFS Cyndi Lauper owns a house like ten miles from me, and I live in Hills Have Eyes territory (seriously, they filmed part II out here)

Athletes and Entertainers come in but businesses and jobs go out because they rather go to another state who doesn't bleed them in taxes and wages.

 

[SMEAC]

I like to blame the guy for being too wealthy, its very constructive

 

[lifelessheap]

well weather clearly has to do w/ that as well.

California has the highest state tax in the US< yet we have no problem attracting rich cats, atlhetes, and entertainers to our area. FFS Cyndi Lauper owns a house like ten miles from me, and I live in Hills Have Eyes territory (seriously, they filmed part II out here)

California is losing thousands of businesses and is experiencing a loss of high skilled labor to states with cheaper taxes.

Try again.

 

[HunterSdVa29]

California is losing thousands of businesses and is experiencing a loss of high skilled labor to states with cheaper taxes.

Try again.

I said rich cats, athletes and entertainers did i not?????

try again

 

[Falsedawn]

There are too many people using taxed based services and not putting back in. All comes down to illegals. They are a large work force, avoid taxes and send money out of the state, out of the country.

Schools have 6 kids in a classroom who have parent paying school tax.

Cops babysit areas who have more people using taxes then paying property tax, like 3 families in a 1 family home

Illegal immigrants don't pay sales tax?

 

[VulcanNervPinch]

Nobody is that important in reality.

When your economic system rewards them that much and makes them that important, it's not working.

 

[RedRocket44]

There are too many people using taxed based services and not putting back in. All comes down to illegals. They are a large work force, avoid taxes and send money out of the state, out of the country.

Schools have 6 kids in a classroom who have parent paying school tax.

Cops babysit areas who have more people using taxes then paying property tax, like 3 families in a 1 family home

There's what -- something like an estimated 11-12 million illegals as of Jan 2012, in a country over over 300M people?

https://en.wikipedia.org/wiki/Illegal_immigration_to_the_United_States

Your numbers are grossly inflated.

 

[KILL KILL]

There are too many people using taxed based services and not putting back in. All comes down to illegals. They are a large work force, avoid taxes and send money out of the state, out of the country.

Schools have 6 kids in a classroom who have parent paying school tax.

Cops babysit areas who have more people using taxes then paying property tax, like 3 families in a 1 family home

yes, it's always the poor people that make the least, spend the least, but somehow have the greatest impact. Go figure.