Wednesday, September 28, 2011

The Snooki Tax Credit

Considering the brouhaha over tax credits extended to "The Jersey Shore", it seems that many of the arguments miss the larger point: the conclusive evidence that left wing tax policies destroy an economy.

Of course, many on the left know this: many of the so-called "job creation" bills, state and national, provide some sort of tax preference designed to favor a particular industry or activity. It’s amusing, then, to see prominent leftists passionately decry "tax cuts for millionaires" while, at the very same time, proposing ... tax cuts for millionaires. But, then again, consistency is the hobgoblin of small minds, no?

Film production companies demonstrate, in real time, the destructive nature of leftist economics and the hypocrisy of those who support them.

Film projects are, by their very nature, highly mobile. If one wishes to film in a court house, one can do so as easily in Newark as in Somerville; as easily in MA or PA as in NJ. And, as Paul Mulshine pointed out, the benefits to local economies of those projects can be substantial. Seaside Heights businesses benefitted from the rooms rented, the meals eaten, and the money spent by the production crew of the Jersey Shore, never mind the increase in tourist revenue.

Put simply, tax cuts work.

Like every other business, film production is all about the bottom line. While one’s production crew needs to be fed and housed, other costs vary. As herein applicable, taxes.

NJ’s business tax rates are among the most absurd in the nation, having been doubled under the McGreevey administration, and supplemented under the Codey/Corzine regime, all in the name of "fairness" and making business pay its "fair share". A film company, deciding where to shoot, must choose between NJ’s idiotically high taxes, and more reasonable rate elsewhere, which may be zero. No points for guessing how those decisions usually come out.

The Legislature – last I looked, controlled by precisely the same Dems who never tire of demanding that "rich" folks pay ever more – responded to the threat from film industry millionaires to take their business elsewhere by granting tax credits. Enter – alas – Snooki.

So, consider the Dems’ position: while screaming that Christie refuses to tax ALL millionaires, they fight to provide tax relief for SOME millionaires, because this latter group, being easily mobile, will react immediately to the Dems’ idiotic economic policies by vamoosing.

But the same concerns which motivate the producer of a televisions series to seek less graspy jurisdictions apply equally to other businesses as well. Just not so quickly and not so publicly.

Dem economic policy is all about the short term, defined as next November. If we slap a huge tax on company A, with a factory here in NJ, it will, almost certainly, produce more revenue. Today. Which enables the Dems to hand out goodies – paid for with other people’s money – to their loyal constituencies. Today. Just in time for the election.

But when the time comes to decide whether to replace or expand that factory, the business undertakes precisely the same cost-benefit analysis that film production companies do. And as NJ is among the greediest jurisdictions in the nation, that calculus works against us. Not today; probably not tomorrow. But, over time, the inevitable consequence of envy-based, redistributionist policies is economic catastrophe.

Sure, it’s easy to demagogue the issue; Assembly leftists specialize in it. "Christie and the Republicans are permitting those evil folks who succeeded to actually KEEP some of the money they earned! How dare they?!?" But even the slightest rational thought – granted, that’s rare on the left – leads inexorably to the conclusion that if the "rich" guys who make movies will make those movies in low tax jurisdictions, the "rich" guys who make cars, drugs, etc., will do precisely the same thing. You can produce as many studies from Obama-donating Princeton professors, contending that taxes don’t matter, as you wish; the evidence from the film industry could not be any clearer. High taxes drive away business, to the great impoverishment of the polity.

We made a reciprocal mistake with public employees: politicians, seeking short term electoral gain, promised present employees unaffordable future benefits, which exploded long after the pols who dug us into this hole had moved on. Similarly, short sighted tax policy – enacted by envycrats with an eye on the next election and who count upon an economically illiterate electorate – gradually undercuts the economy. The film industry simply demonstrates, on an accelerated time scale, the effect of leftist economic policy. Simply put, if you tax them, they will leave.

The health of the economy – state or national – depends upon welcoming investment, attracting businesses, and encouraging them to stay, not by playing favorites and granting special, "targeted" tax benefits to favored or high visibility businesses, and certainly not by reviling them for their failure to pay their "fair share".

Instead of this credit for that company, an abatement here, or an "enterprise zone" there, NJ’s policy should be simple: eliminate business taxes entirely, pare back regulations (e.g. repealing the Highlands law), and turn the entire state into an enterprise zone. Prosperity results when liberty obtains and everyone will have the opportunity to participate therein, and to go as far as their talent and effort will take them.

Friday, September 16, 2011

MacInnes Misses the Mark

NJSEEDS styles itself as an entity which "prepares academically talented, financially limited youth for success at competitive secondary schools." Its boasts an elite roster of "partner schools"; if a single one of those schools is a public school, it escapes notice.

So, who administers and supports this attack on public education, which "creams off" the best and the brightest and packs them off to elite private schools?

Well, consider the Board of Trustees, which includes: Larry Wieseneck (Hillary Clinton for President, $2,300; Bill Bradley for President, $500; Wesley Clark for President, $1,000); Joel Benenson ($28,000 in reportable federal contributions, every nickel to Democrats); David Jeffery ($2,000, Howard Dean for America); and, most notable for present purposes, Blair MacInnes, NJ State Senate candidate (D-25), and wife of Sen. Gordon MacInnes (D-25).

I mention a few of the Board Members’ political contributions not to condemn them – quite the contrary; this is an exemplary program which should set an example – but simply to establish that these are not conservatives, launching an attack on public education, but liberals. They have provided a substantial program of school choice

Query: should not their efforts be directed at improving the public schools from which they draw their beneficiaries? Should they be lambasted for undercutting public education and depriving the public schools of needed resources? (Donations to NJSEEDS are, presumably, tax deductible)

Comes now my erstwhile State Senator and legislative colleague, Gordon MacInnes, holding forth on Governor Christie’s educational "reform" efforts. While praising – albeit backhandedly – some charter schools, such as Kipp, and some efforts in Newark, he also contends that NJ’s astonishing spending on public schools "pays off", as our kids do well on NEAP.

(NEAP, incidentally, includes private school students in the matrix, thereby inflating NJ’s ranking. Besides, why is it proper to employ NEAP when assessing student performance in this context, but not when assessing teacher performance? NJ’s SAT scores are decidedly "eh"; subtract private school scores and they become "eh, minus". A subject for another day.)

Celebrating the public schools in Mountain Lakes, Summit, etc., as the Senator does, takes little effort, but the kids there would succeed in almost any environment, and they receive essentially no state aid. Yes, these locales offer great schools; if we adopted the reforms that the Governor (and "right wingers") suggest – such as universal, equal vouchers for every kid – these schools would change ... how? If every kid in the state got an equal voucher, public schools in Mountain Lakes would be able to provide exactly the same service, but property taxes could be cut by half or more. This is bad ... why?

Returning to Charters, the Senator notes the success of several Newark charters and congratulates them on running a longer school day, week, and year than their purely public (remember, charter schools ARE public schools) counterparts. He omits any suggestion that they pay their teachers or superintendents more, which, presumably, he would mention were it true.

So, if longer school days, weeks, and years makes for better results, what’s stopping the Newark public schools from emulating that example? TOMORROW. Surely, the adults who run them, who care only about the children, would offer no objections, right? Would not ESL students benefit from substantially more time in an English only environment? Would not those from impoverished homes and problematic family situations be better off in school? Presumably, the teachers and administrators at the governmentally run schools are no less talented and no less dedicated than their charter-employed colleagues; what precludes Newark from adopting this seemingly obvious reform? If it works for Kipp and Adubato, why not at every school? The Senator doesn’t say.

At base, Senator MacInnes conclusion – "excellent public schools are critical to the state’s economic future" – is simply wrong. Excellent SCHOOLS, yes, – indeed, more accurately, excellent education – but it simply doesn’t matter what entity owns the buildings and employs the teachers.

Which brings us back to NJSEEDS.

If "creaming" bright students out of their local public schools works for these kids, why not for substantially more students? Why not for everyone? Can one argue that MacInnes, as a supporter of NJSEEDS, is undercutting public schools, by depriving them of their best and brightest kids?

Or, alternatively, does the obvious benefit that the students obtain outweigh the consequences for their counterparts "left behind" and the impact on the public fisc?

In at least 85% of all municipalities, the long-suffering property tax payers would massively benefit from equal vouchers; self evidently, neither the local schools nor the students would suffer. Quite the contrary; it would be a boon. Students in urban areas would benefit substantially from the same opportunity NJSEEDS offers to a small number of them: the ability to escape their local, failing schools and secure an education which better meets their needs. The only folks who would "suffer" are those who work for massively expensive, deeply problematic urban schools. And if, as the Senator contends, demographics essentially preclude educational success (or, at least, excuses urban schools for their persistent failure), why are we spending the money on an enterprise which cannot succeed?

I do not share the Senator’s perspective, that demography is destiny. With greater freedom, educational opportunities for urban students – whether of limited English proficiency or very limited means – would massively expand. It’s hard to imagine such a system performing any worse than that which presently exists, and it would do so at markedly lower costs. Reforms which would so obviously benefit taxpayers and students – and which use a program the Senator himself supports as a template – should not be defeated by a sad, ideological devotion to an outmoded, one-size-fits-all 19th century model which has outlived its usefulness and no longer serves the interests of the students for which it was designed, or those of the taxpayers.