George H.W. Bush called Ronald Reagan’s theories “voodoo economics” and Reagan’s own budget director, David Stockman, also not exactly a flaming liberal, debunked “supply-side” or “trickle-down” economics as a pipe dream.
But in the ensuing decades, the notion that eliminating taxes on the wealthy, and on corporations, has become enshrined in the national conservative conscientious. And despite effects of those policies turning out to be as helpful to working people as unicorns flying over rainbows, GOP legislators continue to insist shifting more people’s money to fewer rich people is the tide that raises all boats.
Among the most vehement is Sussex County’s own state Sen. Steve Oroho (R-24), who recently not only touted New Jersey’s recent upwardly mobile tax package as “critical to the state’s economy,” but is chomping at the bit to enact more of the same in the next round of budget hearings.
Oroho was a champion of the recent tax package that raised the price everybody pays for gas by 23 cents per gallon, eliminated the estate tax, and provided an infinitesimal reduction in the sales tax and equally infinitesimal increase in the Earned Income Credit.
“Collectively, the long-awaited elimination of the estate tax, the phase-in of the five-fold increase in retirement income exclusions, the cut in the sales tax, the increase in the Earned Income Tax Credit, and a new $3,000 personal state income exemption for all veterans are already beginning to change the perception of the state. Now, we have a chance to build on that momentum and put the state in a much more competitive economic position.
“In addition, together these factors will create net revenue growth for New Jersey,” Oroho said in a statement released April 6.
Aside from leaving out the gas-price increase part of that package, which AAA estimates will cost the average resident an extra $170 annually, Oroho conveniently ignored mentioning that the estate tax—not to be confused with the inheritance tax, which remains—affected the wealthiest 5 percent of those who leave estates. Additionally, neither he nor anyone else has demonstrated that elimination of that tax would somehow result in an influx of industry to or an increase in jobs for residents of New Jersey.
On the other hand, the sales tax decrease he lauds is from 7 percent in 2016 to 6.85 percent this year, followed by a walloping 2/8 of a percentage point next year. While this results in very little savings for the average person, it’s estimated to reduce state coffers by $186 million annually—the large amount due to volume because unlike the top 5 percent in wealth, the disposable income of the state’s moderate- and lower-income people gets spent on consumer goods rather than invested on Wall Street or deposited in off-shore accounts.
Following the same sort of GOP logic that insists allowing poisons into fresh-water streams will somehow revive the coal and manufacturing industries, Oroho insists that eliminating more taxes on the wealthy will result in job creation, and also in admittedly needed property tax relief (anybody remember when casinos were supposed to take care of that?)
In 2011, Stockman told Reason TV: “We're simply deferring massive taxes unfairly and immorally putting huge debt burdens on future generations and that is just wrong.”
Perhaps Oroho should take a moment to study the actual data behind the slash-and-burn tax cuts he has inflicted, and wants to continue to inflict, on the state.
Or perhaps it's time to replace him with someone who has.