Wed, 06 May 2009 20:26:39 +0000 – By Phil KerpenConservative Commentator
The first electoral battle on the conservative comeback trail won't be in 2010, or even in November of 2009; it's just weeks away on June 2 and it will be waged insidethe Republican Party in the seemingly deep blue state of New Jersey. Former Bogota, New Jersey Mayor Steve Lonegan is running on a platform that touches on all of the best pro-growth, supply-side ideas of the past 30 years, and it's starting to look like he might very well win. His opponent, former U.S. Attorney Chris Christie, is using tired, liberal talking points to attack Lonegan's agenda. Surprisingly some conservatives who should know better continue to support Christie as the only candidate who can win in November. They're wrong. Lonegan can win, and his agenda deserves the strong support of fiscal conservatives.
Lonegan's signature proposal is a flat tax that would take the top state income tax rate all the way down from 8.97 percent to 2.9 percent. That's below neighboring Pennsylvania's 3.07 percent flat tax and well below New York State's top rate of 6.85 percent and New York City's combined state and local income tax of 10.5 percent. The Lonegan flat tax would be rocket fuel for New Jersey's beleaguered state economy, which has been hemorrhaging population and jobs. It would also make the state a magnet for tax refugees from New York.
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Lonegan would use market-based reforms to cut spending and in turn cut his flat tax rate, to 2.5 percent in year two and 2.1 percent in year three. He would overturn the state Supreme Court's Abbott decisions that divert enormous amounts of income tax revenue to a few failed urban school districts and replace them with a school voucher program that empowers parents to choose the best schools for their children. His plan would let families escape the failed public schools that have not gotten better despite millions of dollars being diverted to them from suburban taxpayers. He has a credible plan for slashing bureaucracy that includes closing and realigning cabinet-level agencies and eliminating wasteful spending throughout state government.
It gets better. Lonegan is also proposing elimination of the state's corporate income tax -- long hated by fiscal conservatives as an ineffective, anti-growth, opaque form of taxation.
The corporate tax, after all, falls on people, because only people can pay taxes. Corporate taxes are paid by workers in the form of lost jobs and lower wages, consumers in the form of higher prices, and shareholders in the form of lost profits; shareholders, as anyone who recently checked a 401k statement can tell you, are people too, and lost profits come out of the pockets of regular hard-working Americans.
Chris Christie's response to Lonegan's shock-and-awe supply-side plans for tax reforms, tax cuts, and spending cuts is to trot out tired old class-warfare rhetoric that could have come straight from inside the Obama White House. He decries the fact that taxpayers who pay little or no tax under the state's current progressive rates would see a tax hike. But from a conservative standpoint, that's one of the chief virtues of a flat tax plan; everybody pays his or her fair share, so nobody gets a free ride and becomes an automatic supporter of bigger and more expensive government.
Can such an ambitious program be put into practice in a state like New Jersey? Lonegan makes a strong case that it's possible:
"The governor of New Jersey is one of the strongest executives in the country," Lonegan told me recently. "As governor I would have to appoint hundreds of officials including judges and the Attorney General. I would be able to impound funds. I would have the line-item veto. There are sweeping powers that have never been used for conservative purposes, but they can be and I will do it."
Lonegan should not be taken lightly. Nobody thought he could defeat two ballot questions in 2007, a stem-cell bond issue and a tax-swap swindle that would have locked in higher sales taxes by offering property tax rebate checks that would disappear in just a year or two. Everyone from The New York Times to "smart insiders" from both New Jersey political parties thought these measures, backed by Governor Jon Corzine , would sail through. Lonegan rallied grassroots opposition, traveled the state tirelessly, and helped plant tens of thousands of yard signs all over the state opposing the questions. He beat them both -- the first ballot questions turned down in New Jersey in 17 years.
Steve Lonegan has beaten Jon Corzine before, and if he can do it again he promises to implement an aggressively pro-growth agenda that could be the template for a national conservative revival. For pro-growth conservatives, it doesn't get any bigger than this race, just a few weeks away. Stay tuned.
Mr. Kerpen is a policy analyst in Washington, DC. His web site is www.philkerpen.comand his free daily podcast is available here.
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