The Wall Street Journal's Main Street column uses New Jersey to send a message to President-elect Obama: Don't do it. Don't raise taxes during a recession and don't fall into the mental trap which dictates, "revenues are short, so we'll force more money out of the private sector."
After going over the poor job growth statistics that are all too familiar to our regular blog readers, William McGurn writes,
So how do we respond to these new hard times? Beginning New Year's Day, New Jersey workers will see even more money taken from their paychecks. The money will support a new mandate offering six weeks of paid family leave to almost all New Jersey employees -- right on down to those working in very small operations. In itself, the family-leave tax will not be the ruin of the state economy. But the imposition of yet another new tax at this moment bespeaks a lack of seriousness about what both New Jersey workers and businesses can afford.
For the moment, Mr. Corzine, like Mr. Obama, is putting his faith in public-works spending. Indeed, he has even called on the president-elect to expand his own plans for an infrastructure stimulus to $1 trillion. And it would be hard to deny that our tired infrastructure could use some attention.
But amid all the debate over jump-starting the economy through public works, we risk losing sight of a larger truth: What governors and citizens alike need most is a growing economy that is creating jobs for the people and sending revenue to the capital. Over the long run, the only way to have a healthy and growing economy is to do exactly what New Jersey has not: Trust the people with their own money, and create an environment where initiative and enterprise are rewarded rather than penalized.
Spending will necessarily fall next year because tax collections are so much lower than expected. However, without the other side of the equation - letting the state's residents keep more of what they earned - the state cannot climb back to its former economic status. The Corzine Administration has taken some steps in the right direction, but the journey is much, much longer than what was done in the last two months.