The New Jersey Assembly has been arguing the 23 cent gas tax since June.Â The package includes a reduction in the sales tax and reductions in retirement and estate taxes.
I donâ€™t want to see the price of gas go up any more than anyone else. Â We need it, though, to put some cash back in the Transportation Trust Fund. Â That doesnâ€™t mean we should allow the TTF to be a feeding trough, though. Â 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. Â Our journeymen highway bridge painters make $56.13 an hour plus benefits of $25.16.Â See N.J.S.A. 34:11-56.51 and the latest Morris County Prevailing Wage determination. Â Thatâ€™s where the money is going.
Itâ€™s fair that drivers should pay to maintain our roads. Â One might argue that a gas tax is regressive â€“ lower income people spend a bigger portion of their income on gas. Â One might argue that gas taxes used for mass transit is a forced wealth transfer from drivers to bus and train riders. Â Thatâ€™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. Â I agree that the optics are bad.Â The only way the Assembly could agree on both tax changes was to tie them together.
Whatâ€™s different about New Jersey retirement and estate taxes is that the taxpayer has the choice to pay them or not. Â Everyoneâ€™s going to pay the new gas tax. Â The problem that New Jersey faces is that people with healthy pension and large estates so often choose to leave the state. Â Itâ€™s not uncommon that well paid parents choose to rear children in an expensive house in a great school district. Â After those kids graduate, they leave to another state with lower taxes and worse school, about which they no longer care. Â What does that mean for the state?Â Older, poorer, New Jerseyans stay and consume resources. Â Older richer New Jerseyans split. Â Why would they want to stay and see their retirement income and estate taxed? Â Thereâ€™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. Â Our current 7.0% sales tax was supposed to be temporary. Â In 2017, it will decrease to 6.875%.Â An eight of a point wonâ€™t make much difference to most consumers. Â I is mostly a show.
In short, we need the gas tax increase. Â We need the senior taxes decreased, but for completely different reasons.