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Manhattan Institute Senior Fellow Steven Malanga on the pros and cons of N.J. Gov. Chris Christie’s 10% tax cut proposal.
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New Jersey governor Chris Christie is proposing a 10% income tax cut for every Juan.
In this state as a part of his new budget now critics say it will help the rich and hurt the middle class but.
I think it's not ignited to your recovery that's already begun under his watch so.
Our tax cuts the answer to the state budget problems are gonna find out because we're joined now by -- -- Melinda senior fellow at the Manhattan institute's Stephen.
In -- listen I just happen to think it's a great idea.
That that people get to keep more money that they earned and I happen to be from the school that believes that a lot spend it wisely as opposed to the government taken from a in my off.
It's on this why don't think you're off base but I think I think there's -- the critics of this -- -- saying.
Well if we don't really have the money right now and the average -- only gonna get eighty dollars and ninety dollars but.
That's not Christie's point here I think Christie's point is trying to send the message we've been -- state -- for ten years has been raising taxes increasing regulation.
And have been a -- And the first thing I want to do stabilize the budget in the second thing I wanna do ascendant.
A message to the business community.
In Jersey and around the country.
That were open for business I think that's what -- -- -- mean -- our credit reports and 2004200870.
Billion dollars and well left the state I mean just let's and it's too hard it's too -- it's too expensive and until the message seems more than beef and then just sort of eight.
There's more than just the moral of the story I mean this is -- real economic message please let's keep this money and in our state totally and it really is about business investment.
Jersey ranks.
Among the lowest states among the least desirable states in the country in terms of business investment we're in -- time.
When businesses are being very careful about how they invest -- not giving a piece of that hi there consistently ranked like 4840 ninth in the country.
The government is trying to send the message because really without business investment where you going you're just basically you know -- bubbling along with the rest of the national and.
Yes the flip side the argument though is almost like a Greek like Greece like argument in the sense that.
This is not the time to do something like that because there's a gigantic baht deficit budget deficit.
Huge unemployment this is not the time to be generous even -- -- -- with other people's money.
Well first of all I would argue that the time to be generous of tax cuts as to when there is it usually employment in the state.
That that's that's the first thing I -- but the second thing I would say this is that is that I do think Jersey has still tremendous.
Budget problems because they dug themselves -- really big hole.
But this is really symbolic it's a couple hundred million dollars I think the state is paying more in in -- parliament you know what -- I've been -- they'd cause a financial gimmicks that they've done in the past it's costing them more than this tax cut is gonna.
-- got a minute left and wanna ask you them broaden out a little bit nationally you did you really been sounding the alarm about in -- states.
And local municipalities and how much pressure they're under.
Are we still under that pressure because everyone's given as rosy optimism optimistic outlooks for this year every economist is excited.
Is it too early to say that the threat it's done well battling -- the fiscal threat because first of all if you look at states and cities around the country.
Tax collections have -- great in a lot of places secondly what's happening -- the crisis is moving from the state level down to the city and the school district level account level and the reason that the case.
Is that these places all -- a lot a lot of their tax collections -- property tax collections probably tax collections actually tended to to.
Sort of lagged because they go through these multi year severance but now -- -- where they're getting the full impact of all this tremendous decline in housing.
So states cities can anticipate may be another eighteen monologue lower property tax collections that's not gonna be helpful we have a millennia as usual -- fantastic and bananas to.
