How You Can Start and Operate a Soup Kitchen

Mission Possible: How You Can Start and Operate a Soup Kitchen

How to fix 1 of N.J.'s biggest problems

We can't tell you how many times we've heard Republicans over the last eight years rant and rave about how oppressive taxes are driving high earners out of New Jersey and costing our state billions of dollars. Over and over again Governor Christie has lamented that people can't afford to live in New Jersey and are relocating to more friendly low-tax states like Florida, South Carolina and our neighbor Pennsylvania.

Yet with very rare exception most Republicans, and of course, our Governor, have been strikingly quiet as Republicans in Congress are about to raise taxes on a quarter of New Jersey residents by $2,200 annually while reducing taxes dramatically on the wealthiest 1 percent of our residents in order to substantially lower corporate taxes. According to the Institute for Economic Policy, the top 1 percent will be getting a $74,000 a year tax break. The proposed elimination of SALT (State and Local Taxes) on itemized deduction for federal income taxes would have dramatic negative tax consequences to those whose incomes are between $78,000 and $329,000 -- they would see their taxes jump by $2,400. Again according to the Institute for Economic Policy, 82 percent of the tax cut would go to the richest 1 percent of our state's residents.

The elimination of SALT will hit high-tax blue states like New York, Connecticut, Massachusetts and New Jersey very hard. The Trump administration's response to complaints from New York State is reminiscent of President Ford's reaction to bailing out of NYC during the city fiscal crisis of the '70s. Here is what Mick Mulvaney, President's Trumps Budget Director retorted, "Is it the federal government's fault that New York tax is so high that they are driving people out of the state? I don't think it's up to the federal government to save New York from its bad decision." Governor Cuomo responded to the statement by noting that New York pays $48 billion dollars more in federal taxes than it receives back from the feds "making us the number one donor state in the nation." He indicated that he would be more than happy to lose the SALT deduction if the balance of payments were equal - if New York gets an amount from Washington equal to what it sends to Washington.

New Jersey, like New York, pays much more in federal taxes than it gets back. In 2016, we sent over $117 billion to the federal government and received $86 billion back -- realizing a net loss of over $31 billion dollars. As Senator Menendez indicated "New Jerseyans can't afford to subsidize the rest of the America more than we already do." 13 states subsidize the federal coffers while 37 receive back more than they give. Not surprisingly, low-tax states receive far more from the federal government than they give. Florida gets over $40 billion more than they give, North Carolina over $30 billion and Mr. Mulvaney's home state of South Carolina is the beneficiary of over $23 billion in federal largess. In light of these large differentials, it is any wonder that the states listed above can offer low taxes to lure residents to their borders as the federal government is heavily subsidizing them.

A small addition to the proposed GOP tax bill would make it fairer to all taxpayers throughout the nation and meet the test of being basically revenue neutral:

"No state shall pay more in federal taxation than $10 billion dollars more that it receives from the federal government. Any amount above this amount shall be remitted back to the state the next fiscal year. And no state shall receive more than $10 billion dollars from the federal government than it contributes."

What would this mean for New Jersey? Using 2016 as an example, New Jersey would receive an additional $21 billion dollars from the federal government. This would be more than enough to fully fund education, thereby reducing property taxes along with providing monies to solve our pension crisis and make significant contributions to our infrastructure needs.

Why would the states on the dole ever give away their advantage thus forcing them to raise taxes on their citizens and ability to lure New Jerseyans to their border? Obviously, they would not. We are not so naive to think this equitable amendment would ever be enacted but is just presented to highlight the hypocrisy of Mr. Mulvaney's statement and to underscore the point that the elimination of SALT will only exacerbate the imbalance between donors and largess states. During the American Revolution the rallying cry was "taxation without representation." At this point in time the donor states have a right to cry foul to "unfair taxation because of partisan politics."

The fiscal situation facing incoming Governor Phil Murphy will become far more difficult if the proposed elimination of SALT is enacted. Even the most civic-minded New Jersey residents, facing a four-figure increase in their federal taxes as a result of the elimination of SALT, will be less inclined to pay for increased state taxes to maintain our State's crucial social service safety net and to fund other vitally needed government services.