New Jersey is one of the highest taxed states in the union, not because our state provides better or more services for its citizens than other states, but as a result of waste and corruption. New Jersey can operate on a lot less – your current elected officials want you to believe otherwise so they can divert funds in ways that benefit THEMSELVES.
The implementation of this plan will require a state constitutional amendment to nullify all current taxes and fees in NJ and replaced with “Fiscal Democracy.” That means that all the current taxes that you have been conditioned to accept will go away. We will eliminate Property Tax, Sales Tax, Gas Tax, Public Access Fees, Vehicle Registration Fees, Corporate Taxes, Realty Transfer Taxes, all government licenses fees, and any other fund the government bleeds out of you.
“Fiscal Democracy” can be funded many ways, but the best approach is by implementation through income tax. Currently, I am proposing a flat personal income tax of 10% for all residents of NJ or earn income from sources in NJ. That will cut your individual tax obligation down by one-third of what it is today within the State of NJ. This translates into approximately $13,000 annually savings for the average NJ household.
The focal aspect of this plan gives the individual the power to appropriate their income taxes where he/she deems fit.
The individual is required to pay 10% of their income to the government. The individual can choose what government programs they want to fund (at any level of government), and can personally choose to de-fund any programs they object to. Of that 10%, the individual can appropriate to whatever government agency he/she desires at any level of government within the State. By the same constitutional amendment that removed all current existing taxes, legislators may not re-appropriate funds elsewhere once an individual specifically appropriates to a specific government program. If the individual wants to place all of their required contributions to the government into his/her local school, then that will satisfy their taxation obligation statewide. The individual will have full power over what government programs they want to fund free of any interference from elected legislators. Once an individual specifically appropriates, a politician cannot undo it.
The only limits that individuals have on how much they can appropriate to a government program are limited by budgetary caps. Budgetary caps will be necessary in this plan to prevent programs from being over funded. Budgetary caps will be implemented by law. A residual effect will be that the government programs that are not important to the people that fund them will become less prominent.
There will be plenty of individuals that don’t want the added responsibility of making specific appropriations to the government, and individuals may abdicate their fiscal responsibility to elected legislators on an individual basis. In this case, the proposed default settings (can be set forth by law), would be 50% of required contributions to the municipality general fund, 15% to the county general fund, and 35% to the state general fund. Legislators may re-appropriate funds in their general funds, and they can only re-appropriate from general funds. This will give legislators power to correct funding deficiencies on a priority basis. This also severely limits legislator’s ability to poorly allocate funds due to the limited amounts available. In essence, elected legislators have to do the right thing because they will be limited on how much they have to re-appropriate. Once Legislators appropriate from general fund to a government program, those funds cannot be un-allocated.
Benefits:
COMPETITION
We full well know the benefits of competition. Competition makes for stronger people, products, and services. We see competition everywhere except where it is needed most – Government! Modern government has no competition – it has established a monopoly on force. Though basic economic principles, we know that a true monopoly is harmful for many reasons. It inhibits innovation. It can price gouge. It can bring substandard products/services to market with no repercussion. If there is only 1 entity supplying what you need, where else are you going to get it from? That principle holds true for government. Our government has become lax in the services it provides us because it has no competition. It holds a gun to your head and says, “Pay me.” You have no recourse. This is how all governments have worked since the beginning of time. “Fiscal Democracy” changes all of that.
“Fiscal Democracy” creates competition for your tax dollars. It forces state government to compete with local governments for your tax dollars. If there is competition for your tax dollars, you bet each level of government will be do their absolute best to provide you with the best service possible - because if they don’t, the program that they work for will be defunded, and they will be out of jobs. This is how the private sector works. It’s about time we apply those principles to government to bring you a better product.
EFFICIENCY
“Fiscal Democracy” will most assuredly provide for more efficient government. At initial implementation, it will reduce the amount of cash flow into government. Goverments will be forced to do more with less.
ECONOMIC BOOST
Imagine if 1 million people in NJ now have $13,000 a year in their pocket. 1M * $13k = $13,000,000,000 injected into the economy – and that’s a conservative estimate. What will they do with it? Some will save. Some will spend. Some will find a balance to spending and saving. Either way, there is going to be a tremendous amount of cash going back into the economy of NJ. What does that result in? Jobs!!! People will be spending more money. Business will need to hire many more people to keep up with the sales demands. Every industry in NJ will grow because people will have a lot more disposable income.
Imagine if there is no property tax in NJ. How many more corporate offices and factories will we draw back away from former boom towns like Atlanta, Prague, Sofia, Bombay and into NJ? We’ll have to build walls to keep every corporation from looking to move their headquarters and operations here. We’ll be the envy of the world. Imagine restoring Paterson and Union City to their former glory. Imagine Camden becoming the epicenter of automobile manufacturing.
There is a hidden upside to this economic boost to the economy….. The governments will get more than 10% on what New Jersey residents are currently earning in income. Increased spending associated with a lower income tax will generate more revenue for businesses statewide, meaning more income for small business owners and employees, who will then face the 10% tax. Thus, we can continue to fund the essential government programs that we have while also lowering the income tax burden on our citizens.
FAQ
HOW WILL MY LOCAL SCHOOL BE FINANCED?
We will use the current State revenue collection services to fund all levels of Government with modification. People that draw a pay check will have weekly deductions. Those deductions can be to anything the individual chooses. There are many people in each town whose primary concern is funding that local school (including the teachers that work there). The individual’s that feel that they get value from their local school will contribute.
WILL I BE REQUIRED TO PARTICIPATE IN THIS?
Somewhat. There will be default settings in place that will allow those that have no interest in partaking in “Fiscal Democracy.” Those people will have to contribute the same 10% as everyone else, but they will contribute to the general funds of the State, County, and Municipality where the legislators at those levels will then appropriate.
IS THIS A FLAT TAX?
Yes, 10% for every individual. This will replace all other taxes within the borders of NJ.
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