Maryland Goes on the Spending Spree

Jersey's budget crunch has many causes, but one of the underreported ones is the state's high-reliance on high income wage earners. Despite what you might hear from groups pressing for even more tax increases on the top 10% of wage earners, NJ's tax structure is already one of the most "progressive" in the nation. Following passage of NJ's millionaire's tax, 5,000 of said millionaire's established residence elsewhere, and during down economic times the budget experiences unsustainable shortfalls.

Maryland appears ready to follow suit, and today's Wall Street Journal editorial, "New Jersey on the Chesapeake" explains the foolhardiness,

As California and New Jersey have shown, a steeply progressive income tax makes state revenue highly dependent on relatively few earners. In good times, those earners do well and the pols spend the excess revenues. But in slowdowns, the state quickly finds itself in deficit, and, true to this form, Maryland's pols now find themselves on the New Jersey ratchet to ever higher rates.

For 190 years, New Jersey somehow managed with no state income tax.