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A Question of Intent
June 21, 2003
By David Michael Rothschild

New Jersey has a very interesting cycle. The voters elect Republicans (Kean and Whitman) who cut taxes too much and do not cut spending. Then they elect Democrats (Florio and McGreevey) to fix the mess by raising taxes and cutting spending. Then they throw the Democrats out of office for raising taxes and cutting spending (who wants that!) and the cycle repeats. With this cycle, the central question is one of intent. When Governor Whitman cut New Jersey's taxes in the beginning of her first term, so much so that Jersey had to borrow several billion dollars, was she contemplating the short term financial windfall for millionaires like herself, was she considering the inevitable cuts that her successor would be forced to make, or was she assuming that her successor would raise taxes to save the State's vital services? In the case of Governor Whitman raiding the state's pension fund, I need to conclude short-term greed was her main motive. In the case of Bush risking the liquidity of Social Security, Medicare, Medicaid, and all of those other crazy liberal programs, I come to a more sinister purpose.

Last week there were two columns in the Newark Star-Ledger about Governor Whitman's economic mess; one concluded that she created the mess to serve her conservative ideology, the other that she did it out of liberal compassion. The moderate, John McLaughlin, notes that while it was a long and winding road, the State of New Jersey is going to have to cut major services for it citizens and it is a direct result of Governor Whitman's reckless tax cuts. While she talked about "giving back" and "trickle down economics," she was simply destroying the budget on purpose. The conservative, Paul Mulshine, concludes that Whitman was just too much of a liberal at heart to make the proper spending cuts to offset her tax cuts. He coldly notes that one cannot be a "compassionate conservative." Compassion costs money and conservatives do not want to spend money on services that can be privately funded. Whitman, he figures, is a just a pure "tax and spend" liberal, without the integrity to raise taxes.

McLaughlin is, I assume, being a little "tongue and cheek" about Governor Whitman being so sinister. She never appeared to intend to destroy the basic social services of the State, especially because she created many of the major social services that they are now being cut. Yet, I cannot conclude that anyone is stupid enough to believe that one can cut taxes and raise spending without having inevitable budget problems. If she really were the "bleeding heart liberal" that Mulshine concludes, then the current spending cuts would not have been her goal, and I would have to conclude she is incompetent. The only reasonable explanation is that she never considered the long-term effects of her actions. She just did not care what was going to happen to the State when she left. All she wanted was to pillage the State's coffers and pass the blame onto others (she got both the money and popularity from giant income tax cuts and the popularity of increased spending).

Governor Whitman also used another popular ploy to pay off her tax cuts; letting the lower levels of government raise the revenue that she eliminated. What happens when you cut aid to the municipalities and the counties? They are forced to raise taxes and cut services. What happens when you refuse aid to the states? They are forced to raise taxes and cut services. Even if the lower levels of government could avoid cutting essential services, the problem with shifting the tax burden to local sovereignties is that each level of government has increasingly regressive tax structures. The federal income tax is progressive. States raise money on generally less progressive income tax structures, sales taxes (which are at best flat), and lotteries (which are completely regressive). Property taxes (at best flat) are the most common way for counties and municipalities to raise revenue. Governor Whitman was looking for a way to defer the pain of taxes to local governments away from her domain. The prospect of power and popularity drove her to create a more regressive tax structure, although I am sure that she understood that she was shifting the tax burden to the working poor. While I have concluded that Whitman is a power- and money-hungry popularity hound, with no true convictions, the similar play on the federal stage is much more sinister, with much more disastrous consequences.

The federal government, run by the Bush regime, is basing its tax model on New Jersey. It is cutting taxes, but not spending (although it is not increasing spending on most services, standardized programs such as Social Security and Medicare are increasing on their own), and shifting the tax burden away from the wealthy, to the middle classes. Are the Bush idealogues simply looking for short-term financial boons (read $350,000 to Dick Cheney)? Are they planning to destroy those programs that create equality of opportunity, healthcare, and financial security for the working classes, but are afraid to directly attack those programs? Are they using the word "double taxation" to create a regressive tax structure (many extremely wealthy people will pay less than 5% of their income in taxes when the stop taxing income from investments)?

When Governor Whitman "retired" from the EPA last month, the Newark Star-Ledger concluded, "she was relegated to shilling for an attack on the environment that she had fought as governor of New Jersey." Lacking any firm ideological principles, Governor Whitman was abused in her quest for power by an administration that has no bounds to its vision of unbridled wealth for a select few. After Gulf War II, the cuts in basic services, the attacks on civil liberties, the environment, healthcare, and education, I must conclude only the worst about President Bush's intentions and long-term aspirations. Nothing in this administration happens by accident. We are heading for an economic disaster, and there is only one thing that can stop it: You. Get angry, talk to your friends, register, and register your neighbors. We need to win in 2004, for your children's sake.

Mulshine - May 23, 2003 - Newark Star-Ledger
Editorial - May 22, 2003 - Newark Star-Ledger
McLaughlin - May 28, 2003 - Newark Star-Ledger

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