HACKETTSTOWN, N.J. – Assemblyman John DiMaio (R-Warren), the Republican budget officer, penned an op-ed for The Star-Ledger Wednesday encouraging New Jerseyans to attend public hearings on the state budget to speak out against the Democrats’ tax increases while the biggest problem is that our state is too expensive in the first place.
Heading into budget season it is more important than usual to look at the past rhetoric of the politicians who control our finances and look at their actions. Because what we have found is what our founding fathers knew: taxes that are too high lead to revenues that are too low, and everybody is worse off as a result.
The facts bear this out. Since Phil Murphy became governor in January of last year, taxes have been raised on already overtaxed New Jerseyans by over $2.25 billion. Income tax revenue is down by over 5 percent and total revenue is 3.5 percent below expectations despite new taxes on the state’s wealthiest, remarkably low unemployment, and strong wage growth. And New Jerseyans are more dissatisfied with their quality of life than ever recorded.
The vast majority of tax increases have been on the working poor and middle class; the same people that those in charge claim to want to help. Taxes on shore rentals, Uber, rehab, registering and renting cars, and utilities are only a few.
For example, a public retirement program will be established for private sector employees and even those retirement savings will be taxed; so much for trying to help people retire. Another example, Senate President Sweeney and Assembly Speaker Craig Coughlin agreed in December that they would not increase taxes – yet they passed another eight tax increases, seven of which came in January on the first chance they got.
Every single person I talk to, on each side of the aisle, will tell you that New Jersey is too expensive. For all the efforts of our state’s most powerful politicians, they have continually made the state more expensive for the working poor and middle class. Raising taxes on the people we are trying to help is a self-destructive irony.
No matter how many taxes are raised on the working poor, middle class, and wealthier residents, we cannot fund our priorities.
Intuition tells us that when more people have jobs, wages are rising, and income taxes were raised, that income tax revenue would increase well over the amount raised last year. But the opposite has happened. Income tax revenue is still down over 5 percent from last year despite every typical metric pointing toward growth.
The income tax funds our schools and is dedicated to property tax relief. Without a doubt, those are the top issues for the people of New Jersey. And yet, spending will have been increased by $4 billion dollars in the past two years while the state as a whole is receiving no relief. Our pensions are still underfunded, schools are left needing billions, and property taxes continue to be the bane of New Jerseyans’ efforts to make ends meet.
The lessons are obvious: excessive taxation is harmful to the people, and government should have learned this the first time. Instead, many of our elected officials continually advocate for more. While the finances of the working poor and middle class continue to become dire in the face of living costs, so does our state government – and taxpayers are always on the hook.
This is not a new lesson. The foundation of our republic was built on the clear understanding that taxes do not help people; they make life more difficult. Taxes serve only to fund the government, but government is a necessary evil that feeds off the prosperity of its people.
Government should be kept as small as the taxes that fund it. Instead, New Jersey has ignored this lesson and our taxes are as big as our government.
No matter how many cost savings are found, and there are billions and billions more that can be had, this budget season we must ultimately list our state government’s primary functions and make them our priority.
No matter how many taxes are raised, the revenue raised will never be enough because our taxpayers cannot afford it. If they could, income tax revenue would exceed expectations instead of falling short.
The lesson is stated in Federalist Paper No. 12, where Alexander Hamilton wrote:
“It is evident from the state of the country, from the habits of the people, from the experience we have had on the point itself, that it is impracticable to raise any very considerable sums by direct taxation. Tax laws have in vain been multiplied; new methods to enforce the collection have in vain been tried; the public expectation has been uniformly disappointed, and the treasuries of the States have remained empty.”
This lesson was learned and revolution was born. Then, our republic was built upon the idea.
The residents of New Jersey must heed our founding fathers and mothers and fight for their livelihood. Our state is too expensive and it is at the expense of the people who live here. Taxpayers must take action to reduce our tax burden; otherwise, it will continue to increase.
On Wednesday, March 20, and Wednesday, March 27, at 9:30 a.m., in Trenton, the Assembly Budget Committee is opening its ears to taxpayers. The Senate budget committee will hold public hearings on Thursday, March 21 at 11 a.m. at the New Jersey Institute of Technology, Campus Center Atrium, 150 Bleeker St., Newark, and Thursday, March 28 at 10 a.m. at Salem County Community College, 460 Hollywood Ave., Carneys Point. I encourage all those who are fed up to let their voices be heard.
Assemblyman John DiMaio is the Republican budget officer. He represents parts of Hunterdon, Somerset and Warren counties in the 23rd Legislative District.