By more than doubling state’s gas tax, out-of-control politicians siphon more money from weary taxpayers.
New Jersey is known as being the brunt of late-night television jokes, and rightly so.
Thanks to its history of union-controlled liberal politicians and heavy taxation, the Land of pharmaceutical companies, Tony Soprano and Chris Christie is also known as the state where you can enter for free but must pay to leave.
As the state with the highest property taxes in the nation, insanely high tolls (and pothole-filled highways), an outrageously-expensive cost of living, and a fleeing citizenry, New Jersey also even has a tax on those who want to leave the state (known as the “exit tax“).
Now, New Jersey politicians in Trenton just gave the state’s residents another reason to leave—it has decided to more than double the gas tax drivers pay.
A major increase in the gas tax in the Garden State will go into effect Tuesday, raising the tax from 14.5 cents per gallon to 37.5 cents.
Republican Gov. Chris Christie and the Democratic-controlled Legislature agreed to the hike because the state had run out of cash to pay for transportation projects.
While the gas tax increase will cost the average New Jersey driver about $3 per tank, the hidden inflationary costs may be worse.
Since the increase is for all drivers, the transportation cost both for businesses located in New Jersey and those that deliver into the state is likely to go up as well. Businesses which rely heavily on transportation will feel the increase the most.
When costs go up, businesses are faced with a few options. The first, and the most likely, is to try to pass through the additional costs to the consumer.
This can be seen when the price of oil goes up, and costs associated with that increase as well. If the business can pass on the cost to the consumer, then those in New Jersey will most likely feel the additional cost burden of more than an extra $3 per full tank of gas.
The second option is for businesses to eat the cost. This results in lower business profits and, ultimately, lower business tax revenue for the state.
It is safe bet to say that, were it not for its proximity to the metropolitan areas of New York City and Philadelphia, New Jersey would be an empty wasteland—a mere tollway from Philly and New York adorned landfills and burnt out buildings.
However, for now, New Jersey still has enough money in its taxpayers’ pockets from which its politicians can steal from.