Corzine Denies He’s a Supply-Sider, But…
August 4, 2006
Proving that there are things a Democrat can say in Trenton that he can’t say in Washington, New Jersey governor Jon Corzine told the Asbury Park Press that he thinks the state might be able to raise tax revenue by cutting its top income tax rate.
Can cutting a tax rate actually increase the flow of revenue to the government? Supply-side economists and their mostly Republican adherents say that it can happen, depending on how high the tax rate is before the cut. The so-called Laffer curve is one economist’s graphic illustration of why it happens.
In an interview with the Asbury Park Press, Corzine said, “I have a . . . view that you could almost lower taxes on income and generate revenue.”
“It’s kind of hard for a guy who has wealth to make that case,” Corzine continued, “but such a high percentage of our income is coming from high-income taxpayers … [that] we have to be very, very careful with the income tax.”
The governor was rebuffing suggestions that New Jersey raise income taxes to fund other priorities, including property tax relief. Among the 43 states that tax income, only five states have a higher top rate than New Jersey’s 8.97% rate, and none are in the mid-Atlantic. (Table of state income tax rates.)
Corzine hastened to add that he did not necessarily subscribe to the economic theory that governments often could raise more money by cutting taxes.
“I’m not a supply sider,” he insisted.