FYI, the tolls will be going up again relatively soon (possibly next year). That will be courtesy of the infamous John Corzine who wanted the legislation passed in the NJ Senate, and signed the legislation to raise the rates in the future. So please don’t be an idiot and try to blame Christie for that next year.
Oh, here’s the link: http://www.nj.com/news/index.ssf/2008/01/corzine_finalizes_highway_toll.html
In case you don’t read the article, the title is “Corzine finalizes highway toll increase plan of 50 percent-plus” and dated January 8th, 2008. The body mentions “A person with direct knowledge of the plan confirmed Statehouse reports of a 50 percent toll hike every four years mixed with annual cost of living increases.”

I think that what has to be examined from a fiscal perspective is what are the gov’t workers receiving in return for their service? If they are full time (and in some cases if they are part time), they receive excellent medical care at little to no cost. Although Christie is asking the teachers to allow a 1.5% cut in their pay to help pay for their healthcare. But this is soooo far less than what most of the private sector has to pay for their healthcare.

And I know several people who are not receiving a salary increase, or have taken a pay cut (some by as much as $10,000 on an income of $70,000) that live in the state of NJ.

My suspicion is that any kind of reform will likely dispense with (or at least modify) the stepped up basis rules, so the capital gains issue will likely persist to one degree or another. Anything to make it more complicated than it needs to be.

Then again, if it weren’t complicated, tax lawyers would have a lot less to do.

So again, Cristie is correct when he says the Democrats could have made the tax increase permanent. Conversely, to say Republicans could have made estate tax repeal permanent is incorrect, as they couldn’t overcome the filibuster threat. To the extent Democrats are making that argument, they’re being disingenuous.

An interesting side note on the estate tax repeal debate of 2006 is that it was less of a Republican/Democrat thing than it was a basic philosophical issue. The actually was more than token Democrat support, but moderate Republicans (most prominent among them Olympia Snow) refused to support Frist’s bill.

Just speculating, but my sense is that what he’s actually suggesting is that it would have been political suicide to have made those tax increases permanent. And while I don’t have any empirical evidence to support it, I’d imagine New Jersey “lost” more than a few high income residents this year.

As for how the estate tax debate will play out this year, it will be interesting to see how this plays out. If I had to guess, I’d say your conclusion is correct that there won’t be a fix, but I suspect the reason won’t be gridlock of the finger-pointing kind.

For the life of me, I never understood why so many tax lawyers, CPAs, and even policy wonks were so convinced–as recently as last November–that permanent legislation would be in place before this year’s temporary repeal. Given the tiny amount of lost revenue, this issue is really only of consequence to that small number of people impacted. On the flip side, it tends to be one of those lightning rod issues for the class warfare crowd. Little economic impact, but politically divisive. Without broad consensus (not impossible if they can agree on an exemption number), the current Congress would be foolish to monkey with it this year.

The current political climate may be a complicating factor. If I’m a conservative pro-repeal legislator, I might be less likely to compromise on anything less before I have a better sense of the composition of Congress next year. Conversely, if I’m a moderate Democrat, I’m not sure reaching a consensus on something as insignificant to most voters as the estate tax will necessarily save my job.

I think I’ve inadvertently turned this into an estate tax discussion. My apologies, but there just aren’t enough people willing to discuss this stuff with me on weekends…or any other time, for that matter (and I’m a tax lawyer).

My point is simply that it’s easy to do nothing with a bill that sunsets and then point fingers. That’s what they’re doing in NJ and it’s exactly what will happen this year in Congress.

As to Corzine’s argument about the temp nature of the increases, I think we all know how that goes. As NJ’s neighbor, we’re having that same argument in Pennsylvania…

I suppose you could say New Jersey has a kind of de facto PAYGO given that it can’t print money, but this is not so much a procedural obstacle as it is simply being forced to grapple with reality. New Jersey also does not have a filibuster, and only a simple majority of both houses is required to pass a budget.

So when Cristie points out that the previous administration could have made the 10.75% rate permanent, he is correct. By contrast, anyone suggesting George Bush and Republican majorities in Congress could have made the estate tax repeal permanent would be incorrect from a procedural standpoint.

It’s probably also important to point out that Corzine’s tax increases were sold politically as only being a temporary fix to close a budget gap, whereas the 2001 legislation gradually phasing out the estate tax reflected Bush’s longer term view on tax policy.

But yes, regardless of what side you’re on, it seems somewhat flippant to dismiss the opposition’s concerns in the manner Cristie has.