The Star-Ledger

Tax Hikes Aren't The Answer

The Star-Ledger — Friday, April 11, 2008

Star-Ledger Editorial Board

A stack of reports has been issued recently telling New Jerseyans what they already know. Even for those who make a halfway decent salary, it's tough making ends meet here.

Housing, transportation, health and child care are among the costlier-than-elsewhere items that make it difficult for folks to pay their bills.

A study done by Legal Services of New Jersey's Poverty Research Institute showed a huge gap between the federal government's definition of poverty – often used to determine eligibility for assistance – and what it costs to live in this state.

For example, by federal standards, a family of three – an adult with two children – making $17,600 a year or less is considered "poor." The Legal Services report, however, found that such a family in New Jersey simply could not meet its basic needs for food, shelter and other necessities with that income. To be self-sufficient, that same family would have to earn $44,000 a year to live in Middlesex County.

Another agency, New Jersey Policy Perspective, a Trenton think tank, also issued a report this week that decried the increasing gap between rich and poor in the state. New Jersey, it said, is among 10 states with the largest increases in income disparity since the late 1980s. Those in the bottom fifth of the economy have seen their wages increase by 10.4 percent since then, while the wages of those in the top fifth have risen by 44.8 percent.

Thursday, representatives of New Jersey Policy Perspective and other groups – including the Sierra Club, New Jersey Citizen Action and the Communications Workers of America – calling themselves Better Choices for New Jersey, argued that Gov. Jon Corzine's budget cuts will further hurt poor people. The way to solve the budget crisis, they said, is to raise taxes.

They suggested hiking gas and corporate taxes, increasing income taxes for the wealthiest 10 percent and raising fees on driver's licenses and motor vehicle registrations.

Not even Corzine, who by all accounts wants to do right by the poor, is willing to endorse their ideas.

These folks need a reality check. Yes, measures should be taken to help lift people out of poverty. A positive step would be to campaign to get the federal government to index poverty guidelines to recognize that what is considered middle class in one part of the country is poor in another.

Hiking taxes that everyone pays, such as fees on driver's licenses, and piling additional taxes on the people who create jobs is counterproductive.

Raising taxes to fund programs for the poor now would be akin to writing a check to your favorite charity when your house is on the brink of foreclosure.

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