NJ Gas Tax 4 October 2016 ?>

NJ Gas Tax 4 October 2016

The New Jersey Assembly has been arguing the 23 cent gas tax since June.  The package includes a reduction in the sales tax and reductions in retirement and estate taxes.

I don’t want to see the price of gas go up any more than anyone else.  We need it, though, to put some cash back in the Transportation Trust Fund.  That doesn’t mean we should allow the TTF to be a feeding trough, though.  NJTransit just gave a huge pay increase to a work force than has had 150 train accidents in five years and has paid plenty of fines.  Our journeymen highway bridge painters make $56.13 an hour plus benefits of $25.16.  See N.J.S.A. 34:11-56.51 and the latest Morris County Prevailing Wage determination.  That’s where the money is going.

It’s fair that drivers should pay to maintain our roads.  One might argue that a gas tax is regressive – lower income people spend a bigger portion of their income on gas.  One might argue that gas taxes used for mass transit is a forced wealth transfer from drivers to bus and train riders.  That’s a social choice voters made when they voted for state government.

The more vicious argument is that a gas tax increase coupled with a decrease in the estate tax is a case of taking from the poor and giving to the rich.  I agree that the optics are bad.  The only way the Assembly could agree on both tax changes was to tie them together.

What’s different about New Jersey retirement and estate taxes is that the taxpayer has the choice to pay them or not.  Everyone’s going to pay the new gas tax.  The problem that New Jersey faces is that people with healthy pension and large estates so often choose to leave the state.  It’s not uncommon that well paid parents choose to rear children in an expensive house in a great school district.  After those kids graduate, they leave to another state with lower taxes and worse school, about which they no longer care.  What does that mean for the state?  Older, poorer, New Jerseyans stay and consume resources.  Older richer New Jerseyans split.  Why would they want to stay and see their retirement income and estate taxed?  There’s no reason that New Jersey should lose its older, richer population to North Carolina or Florida, when New Jersey is a perfectly fine place to retire?

Reducing the sales tax is theater.  Our current 7.0% sales tax was supposed to be temporary.  In 2017, it will decrease to 6.875%.  An eight of a point won’t make much difference to most consumers.  I is mostly a show.

In short, we need the gas tax increase.  We need the senior taxes decreased, but for completely different reasons.

Leave a Reply