Having an economic model for failure named after you is probably a bad sign. Unfortunately, that is what Stephen Moore and Arthur Laffer do in today's Wall Street Journal when discussing the impact of increasing state income taxes on the wealthiest residents.
The piece is a classic free market response to a steep income tax structure and it introduces some new data. However, the section most relevant to our readers asks observers to,
[C]onsider the fiasco of New Jersey. In the early 1960s, the state had no state income tax and no state sales tax. It was a rapidly growing state attracting people from everywhere and running budget surpluses. Today its income and sales taxes are among the highest in the nation yet it suffers from perpetual deficits and its schools rank among the worst in the nation -- much worse than those in New Hampshire. Most of the massive infusion of tax dollars over the past 40 years has simply enriched the public-employee unions in the Garden State. People are fleeing the state in droves....
The Texas economic model makes a whole lot more sense than the New Jersey model.
New Jersey is considering once again increasing the top marginal income tax rate - this time from 8.97% to 10.25%. That would peg our top rate as the nation's second highest, and it is no coincidence that the steadily increasing income tax rates correlate to a decade of stagnant job growth in the Garden State.
All legislators claim to love jobs. It sometimes seems to be the job creators with whom they have a problem.
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