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'Tax Freedom' a matter of perspecitve

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Tomorrow is “Tax Freedom Day,” according to Americans for Prosperity and the Tax Foundation.

NJBIZ wrote about the groups’ press conference yesterday, which marked the day on which Garden State residents have collectively earned enough to pay off their collective 2013 tax bills.

The event is a way to illustrate what the conservatives say is an outsized tax burden and call for a simpler, smaller government.

However, other groups say the notions behind “Tax Freedom Day” are over-simplified and obscure the fact that taxes provide important social services and benefits.

“We all want to spur economic growth in New Jersey so we can create jobs,” said Gordon MacInnes, president of New Jersey Policy Perspective. “But cutting taxes won’t do that. What it will do is cripple the state’s ability to pay for good schools, police and fire departments, safe and reliable roads and trains, clean air and the other public good we expect and rely on.”

NJPP and the Center for Budget and Policy Priorities this week sent emails to reporters in advance of Thursday’s press conference, raising a number of concerns about the “Tax Freedom” calculations.

They note that using average tax payments implies a higher tax burden than many low- and middle-income families pay, since federal tax rates increase with income. That progressive tax structure also means higher-income states like New Jersey come out looking worse, a fact acknowledged Thursday by economists from the Tax Foundation.

The group also argues the projections used by the foundation to estimate taxes residents will pay have proven unreliable.

But the main difference, of course, is philosophical.

Americans for Prosperity Senior Fellow Steve Lonegan on Thursday spoke of high taxes as a curb on freedom. The higher a person’s taxes, the more time she or he must spend working to fill government coffers, instead of to fill their own wallets, he said. Higher taxes thus mean less time working for oneself, and, as Lonegan sees it, less freedom.

MacInnes and New Jersey Policy Perspective, however, emphasize that taxes are a means to an end. In this case, the “end” includes things like paved roads, firefighters and public parks. NJPP says eliminating or curtailing those services in the name of “tax freedom” wouldn’t strike many people as particularly freeing.

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