My tax policy is more than a tax policy.  It’s an economic plan.  It’s a new form of government.  It is a pragmatic step towards true democracy.  Our Republic is currently implemented via a representative democracy.  We elect representatives, and they are expected to implement policy representative of the majority within constitutional limits.  This representative democracy has failed us.  My plan will allow the average person to have a substantial impact on government if they so choose.  Under my plan, the average person will be able to take control of how their government works while still allowing elected representatives to do work on behalf of the people.  Under my plan, you can personally reclaim power from your elected officials and exercise that power YOURSELF!

Problem:  Tyrannical Taxation

Do you have any idea how much money you are forced to pay New Jersey, your county, and municipality?  There are major taxes and fees you pay directly to the government, and hundreds of more taxes you pay via pass through.  An effective example of pass through taxation is the government-sanctioned theft that home renters face on a regular basis.  While not explicitly evident, tenants are still paying property taxes because their landlords pass the property tax burden upon the renters in the form of increased rental rates. This is just one of the many ways the governments of NJ roll out taxes that negatively impact a group other than the one it is intended to affect.  If you are curious about the hundreds of revenue streams they bleed out of the citizens they represent, take a look here:  http://www.nj.gov/treasury/omb/publications/18budget/index.shtml#budget

The average household income in NJ is approximately $70,000/year.  The below data is a rough estimate of what that family will pay in taxation to State of NJ, county, and municipal governments:

Most people don’t realize how much the state, county, and local governments take from you.  The above spreadsheet breaks it down, so you can get a basic idea of how much they take.  If you make more than $70k/year, they tax you even more.  This spreadsheet doesn’t include the additional taxes you pay whenever you make major purchase, such as a used or new car, a boat, or when you sell a home.

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.

Solution:  Fiscal Democracy

In a true democracy, every person votes on laws and conducts the public business.  The founding fathers of the U.S. Constitution realized that a true democracy was untenable due to several limitations, so they gave us a representative democracy.  We now have the technology to move closer to a true democracy.  We have the power to place all appropriations into the hands of the people.  The people, not politicians, should have the power to make appropriations. “Fiscal Democracy” is a much needed additional check to the balance of political power.  Your government has too much power.  The people have very little.   “Fiscal Democracy” turns this upside down and grants people REAL POWER!

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. 

Lower Overall Taxation

Self explanatory.  Instead of strong arming you out of 30% of your pay, the State and local governments will be limited to a summation of 10% of your earnings.  That’s approximately $13,000/year savings for the average house hold in NJ.  Oh, what will you do with that money? 

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.

Transparency

The government does an amazing job at masking their taxation “out in the open.”  You have no idea how much you are paying in taxes.  They like it that way.  Under my plan, they are left with only 1 tax to rule them all.  They can’t hide behind 1 tax. 

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.  

How will my pension be funded?

There are approximately 200,000 FTE’s in the State, counties, and municipalities of NJ.  Those people have spouses, adult children, those currently living off those pensions, friends and family that are worried about the pension system.  That number balloons up to approximately 600,000 people that are worried about the pension systems in the state.  With that number of people worried about it, they are sure to contribute most of their required payments to the pension system.  That’s $billions annually.

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.  

What kind of Libertarian are you proposing an income tax increase?

It’s not a tax increase.  It’s a significant tax decrease.  The increase in the income tax percent is severely offset by the savings you will experience in all of the other tax categories. You will go from losing 30% of your paycheck to the governments of NJ to 10%.  Libertarians come in all types.