December 28, 2010
Some States Are Taxing (and Freezing) Themselves to DeathFollowing up on yesterday's post, Some States Are Taxing Themselves to Death: Roberta Mann (Oregon) notes, Some States Are Freezing Themselves to Death (from these data):
House Seats Gained
House Seats Lost
New York (1)
South Carolina (1)
New Jersey (1)
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More pertinent would be the correlation of the federal tax plus/minus rating of the states to population gains rates. The states gaining HR seats have lower state taxes and are federal tax negative. The states losing HR seats have higher state taxes and are federal tax positive. The expected inference is that many of the services and much of the infrastructure of the states gaining HR seats are financed by the federal government, and thus indirectly by the taxpayers in the federal tax positive states losing HR seats. As higher income northerners and midwesterners move south and west, the southern and western states may be expected to become less federal tax negative, regardless of whether such states raise their rates of state taxation.
Posted by: Publius Novus | Dec 28, 2010 9:18:33 AM
Your "expected inference" is entirely wrong, Publius Novus, as the conservative states don't spend money on monstrous and wasteful social services and on high union wages, as the liberal states do.
Louisiana lost population because Hurricane Katrina forced the relocation of most of New Orleans rather than because of taxes.
Posted by: Woody | Dec 28, 2010 4:09:35 PM
I don't think it's entirely wrong, Woody. To be sure, the southern states offer less in terms of social services (whether they are monstrous and wasteful is a value judgment neither you nor I can make). As for union wages, I assume you are referring to the hated teachers' unions. Of course, the quality of public education in the non-unionized southern states is . . .? But notwithstanding the foregoing, it is clear that even the reduced level of services offered in the southern states, and much of the public infrastructure in the western and southern states (cheap federal water, cheap federal hydroelectric, federal employment at gold-plated military installations) is paid for by federal money. That federal money has historically and disproportionately come from northeastern and midwestern federal taxpayers--many of whom are now relocating to southern and western states. We shall see how long those low southern tax levels can be maintained as urban pressures from interstate immigration increase.
Posted by: Publius Novus | Dec 29, 2010 10:31:01 AM
We've just moved South from a Northern State. The taxes here aren't actually all that different. People (and tax profs) like to focus on taxes because it's easier, but it's the cost of living that's important. Taxes are a factor in in COL, but local regs/laws and land availability are just as important. The above chart is awefully cute, but it doesn't mean much.
And to discuss some points above.
"As for union wages, I assume you are referring to the hated teachers' unions. Of course, the quality of public education in the non-unionized southern states is . . .? "
The existence of unions have about zero to do with the quality of education. I understand that most private schools are not unionized. The point of the union is to work for the teachers. Union leaders would be totally focused on the wrong things if they actually focused on education and the kid's well being.
"We shall see how long those low southern tax levels can be maintained as urban pressures from interstate immigration increase. "
Pretty well, I would imagine. The South has been handling the problem for close to 2 decades now. They also have a fair amount of available land and less of an "sprawl is bad" mentality. The South is pretty urbanized already, with several large cities into the millions. There is no equivalent of LA or NYC but on the other hand, it's hard to imagine those cities will magically empty out in search of lower taxes. ;) NYC, in particular, is full of the descendants of immigrants ventured no further into the North American continent then where the boat had dumped them.
Posted by: Amy | Dec 29, 2010 9:48:43 PM