Lessons Internalized
Several years ago I spent some time documenting the ridiculous of sin taxes. Taxes on cigarettes, alcohol, and the like are promoted as a way to curtail behavior society scofts at. The more a government taxes these things, the fewer citizens will participate in them thus society is better off.
Of course, using government to curtail legal business is bad public policy.
But all that is just a smoke screen. The taxes are levied not to curtail the behavior but to raise cash for the government to spend. The irony is that government relies upon that bad behavior to fund its business. It needs folks purchasing butts and hooch.
It is easy to tax sins. There aren’t many who will go out on a limb to argue against taxing cigarettes. If money is needed, ’tis better to get it from some group like that than property owners.
There is a line, however, for which it does not pay to push pass. New Jersey learned that last year. For the first time ever, a state taxed cigarettes so much that tax revenue shrunk over the year. This year’s report is out and for the second consecutive year, New Jersey tobacco tax fell.
For the second consecutive year, New Jersey has shattered the conventional wisdom on cigarette tax increases: That higher taxes serve the dual and seemingly opposite purposes of reducing and exploiting cigarette consumption.
Do you recall, dear reader, the tobacco settlements from about eight years ago? At the time, states sued the tobacco companies for billions of dollars claiming the tobacco companies are responsible for the health costs states incur treating tobacco-related illnesses. New Jersey, like many other states, received billions of dollars.
We don’t hear about that cash any longer do we? That’s because then governor Jim “I’m a Gay American” McGreevey sold off that cash. Yes, we were supposed to receive some each year. He decided to cash out and blow it on political favors and cute boys working at Drumthwacket. That bundle of cash is now a liability for the state as we are paying the vig on the bonds the state sold.
In New Jersey we take assets and make them liabilities.
Governor Corzine has done the same thing. He needed cash to get matching federal highway dollars. He indebted New Jersey for 30 years to get that cash. We’ll be paying off the debt on those loans well after my children are graduated from college. Still not enough money in the coffers for spending, Corzine rammed through a sales tax hike after shutting down government.
So on the heels of learning that New Jersey lost even more tax revenue from the regressive tobacco taxes, what do we get from the Garden State government?
Well, on Friday we learned of a two-phase toll hike scheme to tax raise money.
Not to be outdone by that, Corzine announced a new spending program. He wants New Jersey state government to purchase foreclosed homes. I kid you not, dear reader.
Speaking this morning on NBC’s “Meet the Press,” Corzine proposed the federal government buy the mortgages at market value then restructure them, and possibly buy houses outright.
A short time later, in an appearance on WABC’s “Eyewitness News Up Close,” Corzine indicated he would follow his own advice, suggesting the state would be buying homes.
“We’re going to do some on-the-ground purchases of homes,” he said. He vowed to “protect neighborhoods” from being devastated by large numbers of foreclosures, which lower the values of nearby houses.
So, the federal government commandeers over $1 trillion dollars to bail out these flawed bankers and now a flawed banker running New Jersey is going to commandeer even more of my money to bail out the folks who bought over their heads. Meanwhile those of us who lead a prudent life pay and pay. Remember, Corzine is a likely candidate for President Obama’s Treasury Secretary.
As the title of this piece states, these lessons have been internalized. It matters not what I think, how I vote, what I do: government is run amok and will keep exercising its power to reach into my pocket.
Tags: bailout, Corzine, government, New Jersey, Politics, tax, tobacco, Transportation-Trust-Fund
Awesome!