The New Jersey Exit

Fiscal Policy: Too many of those pain-in-the-neck productive people living in your state, making everyone else look bad? Want to get rid of them? Let the Garden State show you how it's done through the tax code.

At one time in the not-too-distant past, New Jersey was by some measures the wealthiest state in the country. No more. Wealth is fleeing at an alarming rate. Between 2004 and 2008, more than $70 billion in wealth headed for the exit, according to a new study by Boston College's Center on Wealth and Philanthropy.

Worse, it's not being replaced. Though more people moved into the state than moved out during the period of the study, the net worth of the people who fled was, at $618,300, 70% higher. Those who left also tended to be better educated, more entrepreneurial and more professional.

The problem isn't New Jersey's cold winters. The productive are leaving for states where the climate is more favorable. Increases in levies on income, sales, property and millionaires have all contributed to the exodus.

This, of course, should be a lesson for lawmakers everywhere: Keep taxes low. If you don't, the wealthiest among us, who tend to be the most productive, will find more favorable places to put talents and energy to work.

Some of America’s wealthiest families live in NJ.

They have the ability to hire tax experts that make sure their income is protected from the predatory tax rates inflicted on the rest of us.

I do not blame them for protecting their income for the benefit of their own families.

The more punitive the tax code the more likely revenues to the state will decrease.

Some of America’s wealthiest families live in NJ.

They have the ability to hire tax experts that make sure their income is protected from the predatory tax rates inflicted on the rest of us.

While I do not disagree with your statement, this illustrates the ever-so-common error of looking at the mega-rich like the Rockefellers, Kennedys and Warren Buffett and being impressed if they want higher taxes. When your fortune is so diversified and large that it takes professional management, then higher tax rates are easy to handle. Funds are moved to tax-sheltered investments so that income isn't there to be taxed. The dreaded AMT bite is laughable because their income is already stripped of the 'tax preference items' and so on. In other words, the mega-rich work and game the system to the point where the only thing that they worry about is that some day, sometime, the masses might storm their fiscal gates with an asset tax that actually takes their capital.

On the other hand, there is the working rich, the ones who depend upon their working capital to keep a family business going and a reasonable tax rate to provide incentive to keep growing. These are the 2nd tier of wealth and they will move if possible because they cannot afford the money management schemes that comfort the mega-rich. I would imagine that many are tied to businesses or property and so are probably doing such wealth management on their own. Such schemes frequently mean reducing taxable expenditures like hiring more workers and building larger facilities.

Gee, I wonder what a Laffer Curve looks like?

Well, I'm not in the 500,000 per year money group, but the taxes and the gun laws are enough to make me leave. I will move as soon as I can.

And understand, please, that I am originally a New Yorker who escaped here, only to find that the libs got here before me and transformed this state into the dreadful situation it now finds itself in.

One thing I will say: outside of NYC, NY state has better gun laws.

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