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Friday, July 07, 2006

NJ Exodus?

Fiscal conservative NJ Governor John Corzine reached a compromise with the NJ legislature to raise revenue in order to close a budget deficit yesterday. The plan will increase the sales tax from 6% to 7%. Per Newsday's report:

Half the $1.1 billion that it will raise will ease property taxes, which are among the nation's highest. Corzine had wanted all the money to go toward helping close a $4.5 billion budget deficit.

Wanna bet?

I am not sure from where the increased revenue estimate came but I expect the analysis was what they call "static scoring" rather than "dynamic scoring". In the tax revenue world, a static estimate assumes everything will stay the same so an increase in tax will result in an increase in revenues. A dynamic scoring recognizes that tax changes affect people's behavior. We have seen federal revenues increase substantially from the reductions in marginal income tax rates and reductions in dividend taxes. Conversely, we all know, increase the cost of something and sell less of it. Therefore, NJ gross purchases will likely decrease after the "1 cent" tax hike is operative.

I could not locate any comparables to prove that states that increase sales taxes actually lose revenue. The NJ revenue from sales taxes in the 3rd Q of 2004 were $1.7 billion. So it looks like the estimate merely assumed the same number and size of gross sales and may have factored in inflation.

We know the following:

Per 2006 Except for Ca at 7.25%, NJ has joined MS, RI and TN with the highest state sales tax rate at 7%.
Per 2002 NJ has the highest property taxes in the country.
Per 2000 NJ lost 60,000 citizens to out-migration.

Expect more people to leave the state, expect more e-commerce transactions from NJ residents and expect a smaller increase in revenues than are estimated.

Thursday, July 06, 2006

Subway Hash-Eating Slasher

A man in the NYC subway grabbed 2 cordless power saws from a workbench and swung them at passengers, cutting open one man's chest. The perp was described as having earrings and carrying a teddy bear. He got away somewhere near Columbia University.

Now that Mayor Bloomberg has increased pressure to outlaw gun possession in NYC, his next target will be to outlaw power saws. If it saves just one life...

Wednesday, July 05, 2006

Teddy R's Folly

Thomas Sowell points out the foolishness of Teddy Roosevelt's monopoly busting jihad that landed him on top of Mount Rushmore and deep into the hearts of "progressives". Time Magazine has devoted its recent issue to Roosevelt's "accomplishments".

Sowell provides some historical perspective that most prices were drastically low on products made by the "Robber Barons":

The average price of steel rails fell from $68 to $32 before TR became president. Standard Oil, the most hated of the "monopolies," had in fact innumerable competitors and its oil prices were not only lower than those of most of its competitors, but was also falling over the years. It was much the same story in other industries called "monopolies."

The anti-trust laws which Theodore Roosevelt so fiercely applied did not protect consumers from high prices. They protected high-cost producers from being driven out of business by lower cost producers. That has largely remained true in the many years since TR was president.

Sowell also advises is that James Powell is soon to publish "Bully Boy" that will analyze the harmful effects of TR's policy. (Having read his "FDR's Folly", no doubt this new one will be an excellent addition to the library).

Speaking of "robber barons", I watched an interview on CSPAN3 last night with Peter Krass whose book on Andrew Carnegie looks very interesting. The Left must really hate rags to riches stories. They assume that in order to amass fortunes, people had to hurt others in the process. Part of this is imbedded in their false understanding of economics. They hold to the zero sum game concept that means anyone's accumulation comes at others' losses. But did not Carnegie's railroads help free slaves, transport food to the poor cheaply and help build the cities that can house millions of refugees?

Monday, July 03, 2006

Hindi Instruction Makes The World Peaceful

I received the following response to my letter to the editor. The writer accurately states my original position:

World language better investment than war
To the editor:

Neal Phenes wrote in a letter to the editor (The Packet, June 27) that the West-Windsor Plainsboro Board of Education should not add Hindi to the curriculum because it would raise costs. He said the need for such an addition "must be proved beyond a reasonable doubt" and that "core subjects already being taught must be the focus of our schools."

My family, friends and neighbors in Plainsboro disagree. My family includes members fluent in English, French, Spanish, Mandarin, Taiwanese, Fujienese and Hindi. A primary reason for living in Plainsboro is the commitment by both the schools and the library to promote cultural and linguistic competency in Plainsboro's children, adolescents and adults through various programs and educational opportunities, including the world languages curriculum. A better method of determining curriculum is what benefits the educational future of our children and adolescents. The educational research is clear that languages are best learned at young ages. There is no evidence that WW-P will need to take away any course offerings to add Hindi and current staff may be able to teach courses without additional funding.

With the United States plunged into yet another costly and ill-conceived set of wars abroad, maybe the wisest use of our local, state and national tax dollars is to increase teaching multiple world languages for the next generation, an important route to understand and appreciate world cultures. If the U.S. focused more on funding learning about and appreciating cultural and linguistic difference rather than funding war-making, we as a nation would be more cost-effective in both tax dollars saved and body bags unused.

Stuart Chen-Hayes

Here is my response:

To the editor:

I want to thank Mr. Chen-Davis for his response to my criticism of the proposal to add Hindi to the WW-P curriculum.

I now realize that adding this language to the curriculum will add no costs even though there will have to be new instructors, a classroom and time for this new subject. And even if it did add some costs, since so many of my fellow citizens want this addition to the languages curriculum, how can I possibly object? How could I even consider the cost of anything to be an issue when it involves education or the desires of Mr. Chen-Davis’ friends, family and neighbors?

I just thought I was offering a concept where new costs had to be justified during this economic crisis faced by many residents of Plainsboro. But Mr. Chen-Davis’ last point is most persuasive. He expresses that there is a link of some sort between adding this course to our schools and world peace. I had forgotten the curative powers of Hindi upon Islamic Fascism. If we could only pipe Hindi into Osama Bin Laden’s cave, we may see the kind of magical harmony it has created between the Muslim’s of Pakistan and the Hindus of India.

Thank you.

Neal Phenes

The Princeton Packet refused to print my response. Here are the e-mails:

From: Rick Sinding
Sent: Monday, July 03, 2006 11:54 AMTo: Neal Phenes
Subject: RE: Hindi For Free With World Peace To Boot

Dear Mr. Phenes:

Packet policy limits letter writers to one letter published per 30 days. We occasionally make an exception to this policy, allowing a writer to offer a substantive rebuttal to a response occasioned by his or her initial letter. In this case, however, the response appears to be more sarcastic than substantive -- and does not, in our judgment, add to the constructive dialogue on this issue.

RS

My response:

Thanks Rick:

I understand and respect your policy. I just thought that equating my cost containment argument with some sort of support for the war in Iraq deserved a like response. I guess Chen-Davis’ point was serious, logical and relevant.

NP

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