A model for Chris Bowen. If a tax increase fails to return what you expected, hike the rate!

Dan Mitchell loves to report the weird things that big government politicians do. New Jersey is a classic case. Petrol was quite recently taxed at 14.5c a gallon, second lowest in the US. But then…

In October 2016, then-Gov. Chris Christie signed a bill raising the gas tax by 22.6 cents to 37.1 cents a gallon …the bill also included a clause that automatically raises the gas tax if it doesn’t produce the expected revenue each year. This is a self-fulfilling economic prophesy. A higher gas tax causes people to drive less, which in turn has meant that revenues have fallen short of the expected $2 billion target. So on Oct. 1 the gas tax will rise another 4.3 cents to 41.4 cents per gallon, which will be the ninth highest in the U.S. …This will be the state’s third tax increase in four months, following June’s increase in income and corporate tax rates.

That’s the kicker Chris, a clause that automatically raises the tax if it doesn’t produce the expected revenue. What could go wrong? Read all about it.

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21 Responses to A model for Chris Bowen. If a tax increase fails to return what you expected, hike the rate!

  1. TBH

    Politicians, especially lefty ones, really do fail to understand unintended consequences and the fact that new taxes often fail to raise their expected levels of revenue (see the RSPT here in OZ). I know Christie is supposed to be a Republican, but really he’s as much of a big government shit head as those opposite.

  2. marees

    I thought I was over politics…Politicians are evil crest7res who don’t give a flying duck about the nation or its citizens, just silly games…

  3. wal1957

    TBH @ 9:14

    Politicians, especially lefty ones, really do fail to understand unintended consequences

    I think you are wrong there TBH. My experience with policies of the left is that they do not even consider the unintended consequences of their policies. They are spending other people’s money after all!!!

    Having said that, I have very little respect for any politician these days. Most are only concerned about the vocal minority and the 24 hour news cycle.

  4. Up The Workers!

    It’s called: “doubling down”. It’s a bit like Bowen’s Party, generally.

    The Australian Liars Party was having difficulty with the public perception that their recent Leaders had a marked tendency to ‘handle the truth loosely’.

    So they decided to put an immediate stop to that perception by making the eponymous Bull Shitten their new Leader.

  5. 2dogs

    Voting by foot has started. Some states will soon be dire financial trouble, as the death spiral sets in.

    The US will ultimately face the question on what to do about state insolvency.

    If the answer is, yet again, a Lehman brothers/AIG style bailout, the rule of moral hazard will be etched in stone.

  6. That seems to especially be the way in Australia, just increase taxes (especially sin taxes) to allow more spending.

  7. Entropy

    I think you are wrong there TBH. My experience with policies of the left is that they do not even consider the unintended consequences of their policies. They are spending other people’s money after all!!!

    It’s the announcement that matters, not what it actually does or does not do, or if the thing being announced is feasible. The narcissistic pricks don’t care, confident the shallow brained media won’t be interested in revisiting the matter when it inevitably doesn’t work after backloads of OPM.

    MareeS, you need to be more circumspect. That looks like it could be interpreted as a threat.

  8. …confident the shallow brained media won’t be interested in revisiting the matter when it inevitably doesn’t work…

    It’s not a matter of lack of interest, it’s a matter of policy not to follow or revisit failed Leftist projects. It’s an entirely different matter when it comes to conservative projects.

  9. Ƶĩppʯ (ȊꞪꞨV)

    Yes! this will move the tax rates to marxist’s prefered rate of 110%

  10. Percy Popinjay

    in Australia, just increase taxes (especially sin taxes) to allow more spending

    Alcohol and petrol excise, come on down. The petrol excise is especially obscene, as it is also inclusive of the GST.

    Taxes on taxes – it’s what we do best, apart from big stupid government.

  11. John Bayley

    Chris Christie was at one stage one of the most libertarian-leaning among the prominent Republicans in the USA. His altercations with the education unions can be found on YouTube; some of them are pretty entertaining.
    His, alas, is a classic case of how running for office with the intention to drain the swamp, over time morphs into turning into a swamp creature himself.
    We see it here in AUS often enough, when a bright-eyed candidate for a local MP too soon becomes a mere cog in the Laboral party machine, obediently toeing the line set by the ‘faceless men’ upstairs.

  12. John Bayley

    The US will ultimately face the question on what to do about state insolvency.

    This movie is also soon going to be showing in a Queensland near you.
    Apparently NT is already almost there; lucky they are not a State, hey, so it does not really matter.

  13. John Bayley

    …just increase taxes (especially sin taxes) to allow more spending.

    Soon that will not be necessary – just wait till our politicians discover the Magic Money Theory (MMT), now gaining traction in the US and in particular among the rising stars of the Democratic party.
    Nirvana beckons; just print more money.
    What could go wrong?

  14. Up The Workers!

    “Politicians, especially lefty ones, really do fail to understand unintended consequences…”

    The problem with Lefties is that they utterly lack the intellectual rigour to even consider the intended consequences – let alone the unintended consequences – of their policies.

    Some say that the Greens are the dumbest politicians ever to draw breath, but to give the devil his due, I would say: “Not so!”

    How many times have you seen the Greens go knocking on the A.L.P.’s door for some cheap, used policies? Answer: Never.

    On the other hand, how many times has the A.L.P. bought, rented, pinched, plagiarised or crawled into bed with the Greens over policy matters? Answer: Almost every single time.

    The A.L.P. seem to regard the feral Mung Beaners of the Brown Movement as being their intellectual superiors and universal policy gurus.

    No wonder the economy gets into the state that it does, every time A.L.P. hands get onto the levers of power.

  15. Iva Right

    Up The Workers is dead right. The Greens couldn’t give a rats arse about Labor or Liberal policies but both the major parties fall over themselves and each other to climb on the climate change scam and every other worthless green environmental and social policy. Think the deviant marriage farce and all the gender crap now coursing through the education system. The far left set the agenda and the rest grovel at their feet! The electorate doesn’t seem to care either way. They will when it starts effecting them and make no mistake it eventually will!

  16. OldOzzie

    Andrew Cuomo Announces Loss of Billions in Tax Revenue, Looks for Others to Blame

    New York Governor Andrew Cuomo made a stark announcement this week in regards to the state budget. Following the implementation of his new budget last month he came out to announce that over the course of December and January New York state saw a shortfall of $2.3 billion in tax revenue.

    This is an object lesson for many on the left who feel the rich are a static group they can always depend upon to soak for more funds at their own discretion. The concept is that there is no fluidity in the options of the wealthy, and they will always be there. Andrew was met with a stark reality.

    Cuomo painfully admitted he would now need to cut the state budget as a result of the loss of wealthy residents. The top 1% of New York’s wage earners supply 46% of the income tax revenue. Target them, and some will seek out tax havens elsewhere. Cuomo, of course, looked to place the blame elsewhere.

    The pain felt by Cuomo was palpable. “SALT was an economic civil war,” he said, referring to Trump’s tax plan by employing hyperbole. “It literally restructured the economy.” Cuomo claimed this was an intentional attack on Democratic states, made to benefit the Republican states.

    What he was referring to was the component in the Trump tax cut that limited the deductions that could be taken for state and local income taxes. The tax code made no provision for particular states, just in reference to those with existing income taxes. Of course, lost on Cuomo is that most states with an income tax — and even additional municipal IT — trend to the Blue. His confiscatory taxes are not the cause, it’s that damned Trump and his lack of deductions!

    Also lost on the Governor is the rare argument he is making here; he is upset that the rich are unable to make a tax witholding. That is something he, and numerous other Democrats (such as the Representative from his state, Alexandria Ocasio-Cortez) frequently complain about in speeches. The rich are always demonized for “not paying their fair share” (I return to the 1%/46% ratio mentioned earlier), but now select Democrats are calling for the rich to be granted the chance to have more tax cuts made available.

    The Governor also seemed strained to say that the solution was not to go after more of the wealthy income earners, because that would exacerbate the flight of those tax payers, and looking at solutions. “I don’t believe raising taxes on the rich. That would be the worst thing to do. You would just expand the shortfall,” he said.

    “God forbid if the rich leave,” he said, mournfully. It boggles to actually hear those words escaping his lips. But, welcome to the tax party Andrew. Better late than never.

  17. stackja

    Liberty Quote
    Government has lost its way. Since abandoning its role as an impartial player in society it has taken to abusing the trust civil society invests in government. The corresponding abuse of evidence based policy should alarm everyone with an interest in good policy.

    — Sinclair Davidson

  18. Squirrel

    What we really need, of course, is a seriously “elegant” mining tax – might as well get maximum revenue just in case all those “stranded assets” actually do get stranded…..

    In a world where government spending is routinely misrepresented as “investment”, it’s hardly surprising that our elected and unelected officials start by working out how much they want to “invest” and then decide whose pockets they are going to pick (and how deeply they will reach in) to gather up the necessary.

    There’s also, of course, neat little accounting tricks like “off Budget” items which allows the extravagance to be concealed, up to a point, and thus for arbitrary limits on spending as a percentage of GDP ostensibly to be met.

  19. Tim Neilson

    In a world where government spending is routinely misrepresented as “investment”

    Yes, they always announce an increase in “investment”, but they always announce* a cut in “spending”.

    * Of course they never do cut spending. They either :
    (a) do nothing;
    (b) announce a proposed “investment” of $3 billion then knock $ 1 billion off that announcement and claim that “investing” only $2 billion is a $1 billion spending cut; or
    (c ) increase taxes and get some economist to define the increase as a “cut” in “tax expenditure”.

  20. John Bayley

    @ Tim Neilson:

    Your example reminds me of all the tooth-gnashing over the ABC budget being ‘savagely cut’ – while all that was proposed was a temporary freeze in spending increases.

    It’s an accepted fact that living languages constantly evolve. So I guess the poli-speak is no different.

  21. The BigBlueCat

    Shouldn’t a state budget be geared to what services the state provides? And if the income is too low, then cut the services??? I would have thought that would be the usual axiom for any government … oh, wait, Cuomo is extreme leftist (aka Democrat) isn’t he? It’s more about the taxes than the services ….

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