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Economy
Rich Flee New Jersey, Snookie Remains
2010-02-18
New Jersey's leaders had a great idea for balancing the budget a few years back. Tap the state's wealthy through hikes in income taxes, property taxes and even a "wealth tax". So, how's that working out? Not so well, reports the Newark Star-Ledger:
More than $70 billion in wealth left New Jersey between 2004 and 2008 as affluent residents moved elsewhere, according to a report released Wednesday that marks a swift reversal of fortune for a state once considered the nation's wealthiest.

Conducted by the Center on Wealth and Philanthropy at Boston College, the report found wealthy households in New Jersey were leaving for other states -- mainly Florida, Pennsylvania and New York -- at a faster rate than they were being replaced.
The story notes that this is a reversal from the five years prior to 2004, when wealthy people were moving into the state. All of that stopped abruptly with the tax hikes. That's a big problem for the Garden State because the top 1% of taxpayers pay about 40% of the state income tax. As one expert quoted in the story dryly notes, the loss of those residents may explain state budget shortfalls.

Wow, who knew the wealthy actually had the resources to relocate themselves if they decided taxes were too high?

An alternate theory -- that they are fleeing the state in embarrassment over the "Jersey Shore" reality TV show -- doesn't hold up since the exodus predates the show's premiere. It probably isn't helping though.

Posted by:Fred

#13  Yes, the rich can afford to move. Surprise!
Posted by: mojo   2010-02-18 11:21  

#12  Posted by: AlanC 2010-02-18 10:38

I heard a similar idea a few years ago. But it will never become reality 'cause it is logical and transparent.
Posted by: WolfDog   2010-02-18 11:17  

#11  I like an idea I heard years ago. Limit the Federal budget to the total of tax receipts for the previous year. Anything over that has to be passed as a totally separate appropriation by 2/3 of both houses AND it has to be for an explicitly declared emergency on the order of a war, AND anyone voting for it needs to be term limited to current term (+1 for house) so that they are showing an up front committment to the critical nature of the problem.

Posted by: AlanC   2010-02-18 10:38  

#10  I'm a big believer in national debt repudiation, because it will not only work, but work faster than any other technique, lead to recovery here and internationally faster, and force discipline where there is none.

First of all, debt repudiation primarily hits on "imaginary money", created out of leveraged debt, entitlements, promises and interest. This means it mostly nails speculative gamblers instead of "brick industries."

Second, it hits very quickly, before they can cash out and "buy good money with bad". If all they have is numbers on a computer, then they have no money.

Third, no more budget deficits. The only money in the Treasury are that years tax receipts. International trade ends as well, except for commodities transfer. 10-20 years later it will pick up again.

Outsourcing is dead as well. If America wants it, it has to make it. This starts our economic recovery.
Posted by: Anonymoose   2010-02-18 10:33  

#9  And so it is with most States where taxes are very, very high, i.e. blue states and all that is wrong with them. The people who create wealth go somewhere where taxes are lower.
Posted by: JohnQC   2010-02-18 10:16  

#8  they'll be coming up with a VAT for us That will be very good for strangling economic expansion, not so good for paying down the national debt. For that a growing economy is necessary, and I just don't see that on the horizon.
Posted by: Anguper Hupomosing9418   2010-02-18 09:56  

#7  Keep an eye on Barry's "Deficit-reduction panel." Unless I miss my guess, they'll be coming up with a VAT for us. Of course it won't have Barry's name on it.
Posted by: Besoeker   2010-02-18 09:30  

#6  Still no sign of any new ideas about how to pay off the national debt. Repudiate or inflate are the only ideas on the table.
Posted by: Anguper Hupomosing9418   2010-02-18 09:26  

#5  There was talk a year or so ago about seizing peoples 401K and IRAs to put them in a state-managed fund like Social Security.

You know - so that everyone has a fair share.
Posted by: CrazyFool   2010-02-18 08:39  

#4  The public pension checks won't stop. They'll get bailed out by the Feds. And when that doesn't work anymore, they'll get bailed out by merging with non-bankrupt plans like your 401(k) & IRA. Only after that runs out will they fail.
Posted by: Glenmore   2010-02-18 07:23  

#3  When the public pension fund checks stop, it will all come tumbling down. I don't think we have long to wait in California. New Jersey and Illinois will be following in hot pursuit. The Gig is nearly Up.
Posted by: Besoeker   2010-02-18 06:37  

#2  SO, tell me how Barry's big Budget moves are gonna be paid for?

Well, we could cancel military Contracts or raise taxes(a little).

And we could apologise and then everything would be alright.

November is gonna be fun.
Posted by: Solvent   2010-02-18 06:33  

#1  Aesop (also spelled Æsop or Esop, from the Greek Αἴσωπος—Aisōpos) (ca. 620-564 BC). The Goose That Laid the Golden Eggs is one of many fables attributed to Aesop.

Two and a half millennium and humans still haven't picked up on their basic behaviors. But, we're so smart and modern, we're different. /sarc off

Posted by: Procopius2k   2010-02-18 05:09  

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