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Across the South and Midwest—in Georgia, Oklahoma, North Carolina, Louisiana, Indiana, Kansas and elsewhere—Republican-dominated states seek to eliminate income taxes and replace part of them with regressive sales taxes. This would shift the tax burden to people in the lower earning tiers of the economy while at the same time reducing revenue for programs designed to assist those people.

The philosophical underpinnings of this shift comes from the laughable Arthur Laffer, he of right-wing "trickle-down" and "supply-side" theory, what George H.W. Bush once referred to as "voodoo economics." He claims states with lower income tax burdens economically outperform those with higher taxes. Laffer has worked with the notorious American Legislative Exchange Council to make the case for states to shift the tax burden to those least able to pay.

The Institute on Taxation and Economic Policy has a new report out—States with “High Rate” Income Taxes are Still Outperforming No-Tax States—which, if the authors were less polite would call the ALEC-Laffer claims bullshit. In short, the report concludes, economic conditions in states with income taxes—even with the highest top tax rates—are "at least as good, if not better" than in states without a personal income tax.

• In reality, states that levy personal income taxes, including the states with the highest top rates, have seen more economic growth per capita and less decline in their median income level over the last ten years than the nine states that do not tax income.
Unemployment rates have been nearly identical across states with and without income taxes.

• Laffer’s claims to the contrary rely on cherry-picking a number of blunt, aggregate measures of economic growth that are closely related to population trends, and incorrectly asserting that tax policy is a leading force behind the migration trends that fuel this
growth. Laffer omits measures like median income growth and state unemployment rates in his comparisons of states with and without income taxes, yet selectively cites these measures in other studies when the story they tell fits his preferred narrative.

• More fundamentally, Laffer’s simplistic analysis fails to account for the fact that states without income taxes often choose not to levy such a tax precisely because they possess unusual economic advantages that allow them to raise revenue (and grow their
economies) in ways that other states cannot. In-state analysts and Laffer himself have correctly observed that factors like natural resources, federal military spending, and even favorable climate contribute to state economic growth. Many of these factors are of
great significance in states without income taxes, but while Laffer mentions them in the text of his reports, he makes no effort to control for them in his quantitative analyses.

There are currently nine states without income taxes. Four of them are doing worse than the average state in economic growth per capita: Texas, Tennessee, Florida and Nevada. Five of them are doing worse than average in median income growth: New Hampshire, Florida, Tennessee, Alaska and Nevada. Six of them have had higher than average annual unemployment rates over the last decade: Texas, Florida, Tennessee, Washington, Alaska and Nevada.

Chalk up another pile of crap for the supply-side theorists.

Originally posted to Daily Kos Economics on Fri Mar 01, 2013 at 08:22 AM PST.

Also republished by American Legislative Transparency Project, In Support of Labor and Unions, and Daily Kos.

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Comment Preferences

  •  Tip Jar (138+ / 0-)
    Recommended by:
    navajo, speak2me, chrississippi, Odysseus, JayRaye, Richard Cranium, DEMonrat ankle biter, BeninSC, virginwoolf, afisher, nailbender, Byron from Denver, bronte17, SoCalSal, Thinking Fella, Texknight, mofembot, jeturek, DeminNewJ, Mentatmark, Habitat Vic, Glen The Plumber, sebastianguy99, Polly Syllabic, ferg, Empower Ink, Sylv, Youffraita, notrouble, Roadbed Guy, science nerd, luckydog, AllanTBG, tonyahky, avsp, Statusquomustgo, Eddie L, Renee, ko62, Steven D, a2nite, Deep Texan, ER Doc, ontheleftcoast, basquebob, philipmerrill, Eric Nelson, jck, VTCC73, LamontCranston, oldpotsmuggler, AnnetteK, Joieau, YucatanMan, leftist vegetarian patriot, occams hatchet, Glacial Erratic, roses, john07801, rlb, xaxnar, TomP, Powered Grace, kerflooey, elwior, OregonWetDog, tampaedski, sc kitty, createpeace, absdoggy, RustyBrown, irate, TheDuckManCometh, Front Toward Enemy, Heart of the Rockies, surfbird007, bfitzinAR, sanglug, No one gets out alive, skohayes, GeorgeXVIII, barkingcat, puakev, thomask, cyncynical, carpunder, peachcreek, wader, Calamity Jean, Danno11, jediwashuu, efrenzy, LinSea, musicsleuth, cybersaur, vikingrob, SanFernandoValleyMom, monkeybrainpolitics, tofumagoo, ridemybike, catly, Gemina13, Shippo1776, billlaurelMD, Jim R, CoolOnion, marleycat, fhcec, dmhlt 66, Brooke In Seattle, owlbear1, Zinman, Kingsmeg, WheninRome, JekyllnHyde, OhioNatureMom, FogCityJohn, RhondaYes, Chinton, hyperstation, howd, BYw, priceman, Larsstephens, myboo, Eric Blair, RJDixon74135, ItsSimpleSimon, anodnhajo, eeff, NoMoreLies, Hirodog, TracieLynn, wintergreen8694, Oh Mary Oh, joedemocrat, bfbenn, MKHector

    Don't tell me what you believe, show me what you do and I will tell you what you believe.

    by Meteor Blades on Fri Mar 01, 2013 at 08:21:34 AM PST

  •  If all of the job creators can prosper just by (13+ / 0-)

    buying their own wares, then they won't need consumers anymore, and they can strip us of whatever they want....until we are too weak to even function at the jobs they provide so charitably for us, that is.

    Who do they think consumers are, anyway, and what do we spend?

    Of course they don't care.  The old billionaires and millionaires will be dead by the time total distribution has tipped to that point where the shelves are stocked and nobody is left to spend any money.

    Ayn is the bane! Take the Antidote To Ayn Rand and call your doctor in the morning: You have health insurance now! @floydbluealdus1

    by Floyd Blue on Fri Mar 01, 2013 at 08:41:15 AM PST

  •  The entire report is worth reading (5+ / 0-)

          For the faint of heart, it is in no way a TL:DR!

         

  •  So Florida, Nevada and Tennessee are worst... (7+ / 0-)

    ...in GDP, unemployment and income growth, and are no-income tax states.  Looks like a pretty clear correlation there, but I can't quite see the links between the lack of tax and the economic indicia.  Florida is basically a Republican-run criminal enterprise (remember, it's practically legal to bribe legislators), both Florida and Nevada had masive real-estate cave-ins over the last 4 years, and both Florida and Tennessee are heavily Republican-dominated.  But I'm not quite seeing how their tax policy is driving their economic indicia down.  Thoughts?

    The road to Hell is paved with pragmatism.

    by TheOrchid on Fri Mar 01, 2013 at 09:04:55 AM PST

  •  I live in one of those sales tax states (7+ / 0-)

    It doesn't have to be a terribly regressive tax and I can think of another tax that is FAR more regressive. How a sales tax really works out is going to depend on what is excluded and what other taxes are used to fill in around the edges.

    The Washington state sales tax excludes food and housing. Those are a huge part of the cost of living when I earned only $13,100 one year.

    When I break down my taxes that year:

    1. WA state sales tax effective rate of about 3.3%

    2. Social Security and Medicare tax rate 7.5%

    3. Federal income tax rate 0.9%

    The big problem with a sales tax is what happens when a recession hits. Income tax revenue declines based on the reduction in paid wages. A sales tax drops in response to a decline in sales. So it declines based on lost wages and due to spending cuts by those in fear of loosing their jobs.

    A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

    by notrouble on Fri Mar 01, 2013 at 09:31:02 AM PST

    •  In spite of those exclusions--which certainly help (1+ / 0-)
      Recommended by:
      OhioNatureMom

      ...poor people--the sales tax is still likely to be regressive.  This is, in general, because there are often offsets, caps and loopholes which permit high earners to escape more of the effects.

      "Ridicule is the only weapon which can be used against unintelligible propositions." - Thomas Jefferson

      by rfall on Fri Mar 01, 2013 at 10:41:53 AM PST

      [ Parent ]

    •  You are leaving out the B&O tax (2+ / 0-)
      Recommended by:
      myboo, grover

      which is hidden from your view because it is paid by business, the B&O tax. It's a stupid and regressive tax. The worst part is B&O taxes are based on gross revenue not revenue minus expenses. Washington State always comes in at the higher end of the top taxed states but the population does their math like you do and thinks they are doing better then states with an income tax.

      Our tax structure would be more stable, meaning fewer boom and bust cycles, and more progressive if we had an income tax.

      •  In turn we have no business income taxes (0+ / 0-)

        I understand the B&O tax can be a bit unfair, businesses get hit with it even if they are not profitable.

        Washington receives a favorable business tax rating from the Small Business & Entrepreneurship Council, classifying it as one of the 15 best states.

        A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

        by notrouble on Fri Mar 01, 2013 at 05:05:05 PM PST

        [ Parent ]

        •  Yes this is a good state (1+ / 0-)
          Recommended by:
          myboo

          for business but it is one of the worst in unfair tax systems.

          The greatest tax burden is carried by the poorest people. Because the B&O tax is hidden, even you don't include it in the taxes you pay but you still pay it, we need an income tax.

          •  Can't you say the same thing about (0+ / 0-)

            Business income taxes? In fact, you can pretty much say that about any business tax. I don't mean that we should eliminate business taxes, they have their place. We just need to understand that they become a part of the price of the goods or services they provide.

            Because the B&O tax is hidden, even you don't include it in the taxes you pay but you still pay it,

            A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

            by notrouble on Fri Mar 01, 2013 at 05:39:36 PM PST

            [ Parent ]

    •  Other taxes, too... (1+ / 0-)
      Recommended by:
      grover

      WA also has among the nation's highest taxes on liquor, gasoline, and cigarettes.  
      Those tend to be regressive, as well, though other policy issues also enter into those decisions.

  •  Reality has a liberal bias (6+ / 0-)

    because the wealthy and neoliberals want to believe something so bad that facts don't matter.

    ¡Cállate o despertarás la izquierda! - protest sign in Spain

    by gjohnsit on Fri Mar 01, 2013 at 10:08:11 AM PST

  •  The bottom line is that the money still (4+ / 0-)

    has to come from somewhere.

    People who advocate removing state sales taxes act like they can do it with no consequences or something. But, they still need the money. It's still "coming out of the economy" (as they call it). At the very best, it's a zero-sum game. But, as pointed out in this diary, it's worse than that, because the people who make up the difference are those who spend a larger percentage of their income.

    If it's true, as these people like to say, that "whatever you tax, you get less of", then taxing spending is about the dumbest thing ever.

    Freedom isn't free. So quit whining and pay your taxes.

    by walk2live on Fri Mar 01, 2013 at 10:14:59 AM PST

    •  It would be interesting (0+ / 0-)

      to look at a similar analysis with sales taxes and property taxes, to see any general patterns in the various methods of taxation vis a vis their effects on social and economic outcomes.

      Small varmints, if you will.

      by aztecraingod on Fri Mar 01, 2013 at 10:45:09 AM PST

      [ Parent ]

  •  Yep and here's a chart from ITEP showing.. (8+ / 0-)

    ..lower income folk get hit the hardest with these no income tax proposals.

    This is the real redistribution of wealth. Taking from the 99% straight to the 1%ers -  the GOP has made the opposite claim as the main tenet of their platform.

    Rachel Maddow reports Bobby Jindal & Brownback (Kansas) are proposing eliminating income tax altogether.
    Maddow Blog

    Louisiana Gov. Bobby Jindal (R) recently unveiled an ambitious new approach to tax policy, in which his state would eliminate income and corporate taxes altogether, and replace the revenue through increased sales taxes. If you thought his plan couldn't get more offensive, think again.
    To shift the tax burden from income to purchases would, of course, be radically regressive, rewarding the rich and punishing the poor. The Tax Policy Center and the Institute on Taxation and Economic Policy both scrutinized Jindal's proposal, and concluded it would be a breathtaking experiment in redistribution of wealth -- in the wrong direction.
    - emphasis added
    Image Hosted by ImageShack.us

    Institute on Taxation and Economic Policy
    Regressive tax. A direct hit to the most vulnerable people.
    After the 2012 elections, Jindal tried to position himself as someone who could help lead his party in a smarter direction, lamenting "dumbed-down conservatism." He neglected to mention he hopes to replace it with "callous and cruel conservatism."
    The real Makers are the 99% the workers/labor. The takers are the 1%/non-labor money changers. - I hope the completely backwards lie of the GOP will finally be broken open. That would be a huge step forward imo

    http://maddowblog.msnbc.com/...
    http://www.itep.org/...
    http://www.forbes.com/...

    •  Isn't it odd, though (5+ / 0-)

      that Brownback has cut income taxes for corporations and businesses, but the personal income tax is still in effect?
      He also has reneged on dropping the sales tax back to where it was after the "temporary" increase to 6.3% from 5.7%.
      Oh, and since he has no way to pay for all these cuts, now he's talking about taking away the very popular mortgage interest tax deduction.
      And the extremists in the Senate are going right along with it:

      The Kansas Senate is having to making cuts to Gov. Sam Brownback's budget, but is close to having a tax bill that resembles Brownback's proposal, The Topeka Capital-Journal reports.

      The Senate widely agrees on two of Brownback's proposals: keeping state sales tax at 6.3 percent instead of allowing its scheduled drop to 5.7 percent, and axing the home mortgage interest deduction, the report says.

      http://www.bizjournals.com/...

      “We are not a nation that says ‘don’t ask, don’t tell.’ We are a nation that says ‘out of many, we are one.’” -Barack Obama

      by skohayes on Fri Mar 01, 2013 at 11:49:32 AM PST

      [ Parent ]

      •  how are Brownback's favorables? (1+ / 0-)
        Recommended by:
        Eric Nelson

        I have to wonder what they'll be if these proposals go through?  And how is it that people cannot see these things for what they are ... major wealth transfers from those who have not to those who have more?  Or did they leave these proposals out of their election campaigns for some reason?!?!?!? /snark ;-).

        How is taking a hundred dollars worth of food from hungry kids or from old poor sick people equal to taking a hundred dollars from billionaires? -- howabout, 19 Dec 2012

        by billlaurelMD on Fri Mar 01, 2013 at 01:36:19 PM PST

        [ Parent ]

    •  An Increase In Sales Taxes Will Put A Damper (1+ / 0-)
      Recommended by:
      OhioNatureMom

      on economic activity and purchasing. So, for Jindal's ridiculous plan to work, he is going to have to put a sales tax on everything - food, clothing, medicine, etc. Putting a sales tax on basic items literally forces people to pay the sales tax. Nobody is going to say "hey, I don't think I will buy my heart medicine this week, because the sales tax is too high." The GOP are a bunch of corrupt SOB's.

  •  Supply Side was always a scam (5+ / 0-)

    It's a bunch of bogus arguments to give an excuse to cut taxes. Cutting taxes is always the real objective - they just keep pouring on the snake oil to sell it to the rubes.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Fri Mar 01, 2013 at 10:32:42 AM PST

  •  Analysis has a well-known liberal bias. (5+ / 0-)

    Which, I guess, explains why conservatives feel the need to cheat.

    Many of these factors are of great significance in states without income taxes, but while Laffer mentions them in the text of his reports, he makes no effort to control for them in his quantitative analyses.

    "Ridicule is the only weapon which can be used against unintelligible propositions." - Thomas Jefferson

    by rfall on Fri Mar 01, 2013 at 10:40:05 AM PST

  •  No state income tax means... (8+ / 0-)

    ...higher other taxes. The basic responsibilities and liabilities of states don't go away. All that goes away is the ability to adequately and sustainably fund them. A certain Labor economist on a staff I used to work for used to always sing the praises of Property Taxes compared to Income Taxes because they were (to paraphrase that person) "always more stable and predictable." That person sometimes suggested that we as Public Employees should consider getting rid of the state income tax in favor of higher sales taxes and property taxes for that reason.

    This was obviously before the Great Recession. Income tax may be inherently volatile, but now any thinking person must accept that any tax base is inherently volatile, so long as it is crafted to advantage the wealthiest among us first and foremost. Taxation of any kind is complicated and inefficient only because the "Owners" constantly seek to avoid their responsibilities to the rest of us.

    When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

    by Egalitare on Fri Mar 01, 2013 at 10:41:57 AM PST

  •  Florida (1+ / 0-)
    Recommended by:
    OhioNatureMom

    So proud to be named in all of those final examples.

    We're all just monkeys burning in hell.

    by smokeymonkey on Fri Mar 01, 2013 at 10:45:32 AM PST

  •  Even before Laffer became Reagan's Golden Boy, (5+ / 0-)

    he was put on a high pedastal while a Prof. at USC.  (I almost took a course he taught when I was an undergrad in the late 70s.)
      One problem with his "Laffer Curve" theory is that conservatives always argue taxes are not at the optimum point on the curve (and therefore taxes must be lowered), without actually knowing where on the curve taxes are currently.  So how can one know which way to move taxes if you don't know where they are now?  But Republicans don't care about the answer.

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Fri Mar 01, 2013 at 11:09:02 AM PST

    •  I think someone actually *did* (1+ / 0-)
      Recommended by:
      OhioNatureMom

      try to figure this out ... and it turns out to be a marginal rate of 50%.  But I might be wrong.  And that might be for all income taxes.

      How is taking a hundred dollars worth of food from hungry kids or from old poor sick people equal to taking a hundred dollars from billionaires? -- howabout, 19 Dec 2012

      by billlaurelMD on Fri Mar 01, 2013 at 01:38:07 PM PST

      [ Parent ]

  •  red states always do worse in everything (5+ / 0-)

    Really, if you look at the results that the states that most often elect Republicans get from the policies enacted by the people they put in office, you'd wonder why anybody ever votes Republican.  (Actually, I know why they do - they're idiots who've been fooled into voting on based religion, and once you get people to believe religion you can get them to buy a bunch of other hogwash, too, on "faith").

    The red states, almost universally, have higher poverty, higher unemployment, higher crime rates, higher infant mortality rates, worse health care, worse roads and infastructure, and take in more money from the federal government than they pay out.  It happens over and over and over again, and the dumbasses who live there never put it together that they're screwing themselves.

    I live in Mississippi and am amazed at how dumb, uninformed, and logic-impaired most of the voters in my state are.  They don't understand anything and never look at the results we're getting from electing Republicans who keep us dead last in everything.  They just keep voting on who they think will outlaw abortion and put prayer back in schools (as if it's actually out).

    Nobody who's really paying attention to cause-and-effect would ever vote for Republicans.

    "Glenn Beck ends up looking like a fat, stupid child. His face should be wearing a chef's hat on the side of a box of eclairs. " - Doug Stanhope

    by Front Toward Enemy on Fri Mar 01, 2013 at 11:18:31 AM PST

    •  maybe they think (4+ / 0-)

      that government doesn't work, so they keep electing people to government that don't believe it does. And therefore, it keeps on not working. Self-fulfilling prophecy; QED.

      How is taking a hundred dollars worth of food from hungry kids or from old poor sick people equal to taking a hundred dollars from billionaires? -- howabout, 19 Dec 2012

      by billlaurelMD on Fri Mar 01, 2013 at 01:39:30 PM PST

      [ Parent ]

    •  I don't know... (0+ / 0-)

      ...I essentially wasted my youth in  Michigan in a futile struggle to stay afloat due to the blatant incompetence of Democratic Governor Jennifer Granholm (who many Kossacks try to rehabilitate with pretty lame excuses) who's floundering economic policies led to Michigan having the single worst economy in the country.  Meanwhile, despite being run by Republican crooks, Ohio's economy did MUCH better (if I could have gotten a job there I would have...).

      "Out on the edge you see all the kinds of things you can't see from the center." - Kurt Vonnegut

      by Mister Gloom on Fri Mar 01, 2013 at 03:40:25 PM PST

      [ Parent ]

  •  When I hear about Laffer, one thing comes to mind (1+ / 0-)
    Recommended by:
    OhioNatureMom

    "Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics."

    I shouldn't even have to name the movie.

    “The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence.” ― Charles Bukowski

    by macleme on Fri Mar 01, 2013 at 11:32:31 AM PST

  •  I'm in Nevada (1+ / 0-)
    Recommended by:
    OhioNatureMom

    No state income tax and a right to work state.  Due to family issues I can't leave right now but would really like to head back to California.  

    Wages are falling, so many places have closed, many foreclosed houses in the neighborhoods.  I used to like Nevada but it has become really difficult for a working class dog like myself to thrive here.

    Saddens me.  :(

  •  Not Nevada (3+ / 0-)
    Recommended by:
    billlaurelMD, Utahrd, OhioNatureMom

    No person could state that Nevada is in better shape because it has no income tax.  It ranks 50 (actually 51) in everything good. And 1 in everything bad.  It has no money to even replace light bulb in street lamps. Worst this worst that.  All because it is revenue starved because it hates taxes.  Only when the Feds come to dump money in for free does it spend on necessary things.  You think Sandoval accepted Obamacare Medicaid money because he felt sorry for the ill, dying Nevadans?  No way.  He saw some free cash and grabbed it.  Bridge bypass to Hoover dam?  Fifty years of discussion.  9/11 paid for it.

    Funny how these states with "low" taxes mooch.  

  •  You have to look at things as a package (1+ / 0-)
    Recommended by:
    OhioNatureMom

    I live near a river that is a state line. Across the bridge income taxes are lower but property taxes are higher. It's a wash.

    •  It's always somewhat of a mixed thing (3+ / 0-)
      Recommended by:
      sharman, OhioNatureMom, Hirodog

      I live in Alabama, whose unofficial state motto is "Thank God for Mississippi" so we can be 49th in the good stuff and 2nd in the bad stuff instead of on the bottom. But living on the Gulf Coast, I have access to the Mississippi public radio as well as Alabama, and the Mississippi station has much better and diverse programming than Alabama, particularly local programming, and that's largely because Alabama provides no funding at all toward public radio and Mississippi does.

      Alabama has the worst of all worlds if you're poor or middle class, a pretty cushy experience if you're aflluent. The state has an extremely regressive tax structure. Sales tax in many areas of Alabama (cities and counties can levy taxes, too) are in the double digits, and there is NO exemption for food.

       The state income tax top rate is fairly low, but it's practically a flat tax, with a very narrow range between top and bottom, and it catches people at the bottom who have very low incomes. Until 2006, a family of four in Alabama making $4,600 (yes, that's ANNUAL income and a family of FOUR) was subject to state income tax.

      That's now been raised to $12,600, which is still lower than all but one state (which indexes its tax floor to inflation, so Alabama may very well be back on the bottom by now).

      The Republican governor, who first proposed to raise the tax floor to $17,000, even appealed to voters as a Christian that it was immoral to tax anyone making that small amount of money. But voters rebuffed him (the supposed rationale was opposition to other parts of the tax reform package). Later legislation set the figure at $12,600.

      Our property tax is laughably low, compared with most states. And our sucky schools show it. I paid about as much monthly for car insurance when I lived in New Jersey as my sister paid annually in property tax in Alabama.

      My brother-in-law has a childhood friend who now lives in Connecticut but owns a house in Alabama his grandmother left him. He said he pays much more in taxes on his much smaller home in Connecticut, but his kids were getting a good education and the schools they attended weren't lined with rows of portable buildings such as we endured down here for lack of funds to repair or expand existing schools or build new ones, and he felt like at least he was getting something for the taxes he was paying.

  •  Is ITEP's underlying point valid? (0+ / 0-)

    I think they're incorrect to use per-capita figures.  Using those basically give a huge boost to states losing population (mostly high-tax states) and a large penalty to states people are migrating to.

    In fact, the median home price in states without income taxes is almost $80,000 cheaper than in the nine states with the highest top income tax rates.
    This is not unrelated.
  •  The Laffer Curve (2+ / 0-)
    Recommended by:
    Brooke In Seattle, OhioNatureMom

    Two points with nothing but pure nonsense in between.

    "When I die, I want to die like my grandfather who died peacefully in his sleep. Not screaming like all the passengers in his car." --Will Rogers

    by Mote Dai on Fri Mar 01, 2013 at 12:50:21 PM PST

  •  I Agree With The Diarist That States Without An (3+ / 0-)

    income tax are not faring any better than states with an income tax. However, instead of arguing over which is better to tax - income (via income taxes) or consumption (via sales taxes), I would like to see capital or wealth (i.e. dividends, capital gains, and inheritances) taxed more heavily to raise revenue in the states. Income taxes disproportionately hit the working class, and sales taxes disproportionately hit the poor. Meanwhile, the rich skate away no matter which tax is raised - a rich person can pay an accountant or tax lawyer to find ways to lower their income taxes, while the average person doesn't have the money to hire a tax lawyer. If capital were taxed more, it wouldn't hit the middle class or the poor - it would hit the rich.

  •  Aren't most of the high income tax rate states (1+ / 0-)
    Recommended by:
    OhioNatureMom

    blue?

    I realize the no income tax rate is a red state thing but I would hope they could draw that correlation (in my opinion, also causation) between the two.

    Progressives (as ideas, citizens and governing) can help everyone in their community, across the board.

    People, not corporations. Democracy, not totalitarian capitalism. Fuck the NRA.

    by democracy is coming on Fri Mar 01, 2013 at 01:44:56 PM PST

  •  AK is the most socialist state of all (3+ / 0-)
    Recommended by:
    rolet, OhioNatureMom, Hirodog

    They have very little tax, indeed, each person over the age of 12 gets a nice stipend most years, because the state owns the oil and gas.

  •  Washington's unemployment rate has been high (2+ / 0-)
    Recommended by:
    rolet, myboo

    because the bottom fell out of the forest products industry when homebuilding stopped during the Great Recession.  Otherwise the state's been doing OK.  They're already restarting the lumber mills, but we'll see how long that lasts once forced austerity kills the economy.

  •  I live in a state with no income tax (1+ / 0-)
    Recommended by:
    Hirodog

    Nevada, after leaving a state with an income tax, Massachusetts.

    They regressive fee you to death.
    They regressive sales tax you to death.
    The property taxes are brutal.

    But. Sheldon Adelson sleeps on a bigger pile of money, so, Freedom! Everything is okay! Fuckers.

    I am from the Elizabeth Warren and Darcy Burner wing of the Democratic Party

    by LeftHandedMan on Fri Mar 01, 2013 at 08:05:35 PM PST

  •  Oregon has no sales tax- Guess what! (0+ / 0-)

    When the economy tanks, so does state income!  Need for schools, medical care, prisons didn't go down, but income was way down.  Property taxes were capped in the 90's so that was no help either.  Fees are up, schools are struggling, and it's impossible for agencies to plan.  In addition, if state economists underestimate how much income is coming, then the 'excess' is returned to taxpayers. Brilliant.

  •  New Hampshire (0+ / 0-)

    has one of the highest median incomes in the country, slightly behind Maryland.

    http://www.census.gov/...

    It is run frugally.  

    You can cut the median for numbers of different groups of years, and get slightly different results, but NH is not like the southern states in many respects.

    Note that states that were whacked harder by the Third Depression will to some extent have done better since, in terms of improvement from low bases.

    We can have change for the better.

    by phillies on Fri Mar 01, 2013 at 09:20:47 PM PST

  •  The ITEP report is a good critique of Laffer, but (0+ / 0-)

    with the exception of GDP growth, the differences between hi-tax and lo-tax states are statistically insignificant.

    The charts at the back of the report don't show much of a pattern either. Oregon is way ahead in GDP growth, but Wyoming leads in median family income. The states are all over the place in other indices.

    The report is useful for debunking the lo-tax path to prosperity... but to close the deal in debate with "fiscal conservatives" I need a counter argument that can challenge their conviction in the low tax theory of prosperity.

    So what is it? do taxes put "stagnant" wealth back into circulation? Do they shift money from the "lending & borrowing economy" to the "earning & buying" economy? Do they pay for human and material infrastructure that promotes commerce? All of the above?

    Before I quote this report, I need the "elevator pitch" for why it works.

    Have you noticed?
    Politicians who promise LESS government
    only deliver BAD government.

    by jjohnjj on Fri Mar 01, 2013 at 09:33:43 PM PST

  •  Have they been right (0+ / 0-)

    about anything?

  •  do they ever tell the truth? (0+ / 0-)

    the problem is that the media doesn't challenge their lies.  

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Sat Mar 02, 2013 at 04:22:32 AM PST

  •  state income tax (0+ / 0-)

    Wyoming has no state income tax, where I live we have a 4% sales tax - a lot of our taxes are paid by "extraction companies", oil, natural gas, mining.

  •  Data Do Not All Support Conclusion (0+ / 0-)

    I have done two graphs, comparing Median Family Income with per capita taxes and taxes as a per cent of income.  I exclude Wyoming and Alaska, because their tax systems are centrally based on mineral extraction and do not resemble taxes elsewhere.

    Median family income by state varies by not quite a factor of two, from just under $40,000 to not quite $70,000 a year.  There is a good correlation between tax dollars paid and total income, with a couple of states paying considerably more..  

    I also have a graph of percent of income paid in state and local taxes against median family income. First approximation: the scatter graph shows a square blob, with a couple of states paying considerably more.  On more careful inspection, the graph shows a weak wedge, with states at the top and bottom in family income collecting lower per capita taxes.

    If someone wants to post a copy, I could forward them.

    We can have change for the better.

    by phillies on Sat Mar 02, 2013 at 04:45:22 PM PST

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