Post #143 - Politicians in New York, New Jersey and California

Part 7: Stuff you need to know, now that you know everything about investing (cont.)

I love watching and listening to these guys.  Their states are flat broke and you have to just about break their arms to get them to cut programs.  You see, their first allegiance is to themselves.  They want to be re-elected.  And they realize they won’t get re-elected by taking money or services away from portions of their constituency, even if that’s the right thing to do.  

Here’s an article about how New York State is trying to solve its budget crisis:  New York State Tax Ideas.  Do you see and creativity here?  Do you see anyone going back to their constituents and telling them “Hey, we can’t afford all this stuff”!  No.  You see a lot of sneaky taxes on consumption and a push to get people to gamble more.  By increasing revenue this way, they can brag that they didn’t raise the income tax.

Like New York, New Jersey is also broke.  The governor is trying to cut a number of services/government positions/benefits.  He ran on the platform that he would cut expenses instead of raising taxes and he knows he won’t get re-elected unless he delivers on this.  It’s tough going.  He is being fought tooth and nail be everyone else (it seems).  Since the governor is a Republican, all the Democrats are against his ideas.  Their solution to New Jersey’s budget problem is an additional tax on “millionaires”.  They would prefer to make rich people pay more rather than ask state workers to contribute toward the cost of their health benefits, or cut the number of state employees.   Note that ex-Governor McGreevey imposed a millionaires tax already (back in 2004).  Since that time, rich people have been moving out, which means not only did NJ lose the additional tax McGreevey promised, it also lost the taxes those rich people had been paying previously.  Read this article.  New Jersey Loses Wealth.  I’m sure the Democrats all read this article too, and they know that a millionaires tax will eventually be counter-productive.  But since they are only concerned with getting re-elected, they have no problem promoting this idea, since it is appealing to the majority of voters.   

Thankfully, there are still a few intelligent people in New Jersey.  The millionaires tax idea has been defeated (for now).

By the way, I have nothing against Democrats.  I know that if a Democratic governor proposed spending cuts, the Republican Party would oppose the cuts and propose some other stupid tax as an alternative.  Probably not a millionaires tax, since Republicans and rich people seem to think alike, but it would be something just as misguided.  

The only really novel idea for raising revenue I’ve seen so far is in Asbury Park, NJ.  To entice more people to their beach, where they charge for parking, chairs, umbrellas, access to the sand, and using the bathrooms, the town officials are talking about making the beach topless.  I for one would go there three times a week if they do that, unless the place gets filled up with a lot of old wrinkled German ladies.  They could double the beach fees and I would still go.  Oh wait.  My wife just told me I won’t be going to the Asbury Park Beaches.  But lots of other men would go.

By the way, could you all write in to NJ Governor Christie and tell him it’s a waste of money to fund a NJ television station.  I watch it sometimes to get local news, but we certainly don’t need it.  Unless “The Situation” is the news anchor.  Then it might get interesting.  Lots of fights and cursing.  No, that won’t work, he’s from Staten Island.  The NJ TV station wouldn’t hire him.  

In California, the legislators did offer a few options to the voters that would raise revenue or reduce spending.   But these ideas were voted down.  Hey California.  I know you are disgusted with the mess in the Sacramento Statehouse.  But you need to wake up.  You are broke……and I hope the federal government does not bail you out. 

I figure that eventually, all three of these states will legalize pot for everyone down to the age of seven, because it’s a potentially big source of tax revenue.   They’ll also tax cigarettes to the point where you need a home equity loan to buy one pack.  Soda, energy drinks, Red Bull, beer, wine, liquor, Big Macs, and Whoppers will have hefty taxes.  Don’t tax condoms, guys, or we’ll see a big surge in unplanned pregnancies.

The states should also put a hefty tax on those glasses old people use after they have their cataracts removed.  Hey… it’s another way of increasing income and you can blame the doctors.  And double the tax on any dinners that are served in restaurants before 5PM.  Let’s get the seniors paying their fair share.

How about putting a 100% tax on those stupid little toys people buy for their pets.  Come on, how many chew things does little fluffy need anyway?   What about girl scout cookies?  Put a 100% tax on Thin Mints.  After all, the cookie sale profits go to the administrators, and not to the kids.  So tax those cookies hard!

You are probably wondering about the purpose of this post.  I just wanted to give you a few concrete examples about how politicians find it really hard to be fiscally responsible.  It supports my suggestion in the last post that your taxes will be higher when you are in your sixties.  I’m talking about higher income taxes, capital gains taxes, property taxes, sales taxes, taxes for standing on the sidewalk, and anything else you can think of.

Hopefully our elected officials will become fiscally responsible and I’ll be proven wrong.