Mon
Apr 10 2006
11:28 pm
By: Conservative Guy  shortURL

For once its good to be at the bottom of a 50 states ranking.  In a report released recently by the U.S. Census on taxes per capita by state for the year 2005, Tennessee ($1678) ranks 45 out of 50.  The state with the lowest taxes in the country was South Dakota ($1430) followed closely behind by Texas ($1434).  The highest taxes per capita in the country was Vermont ($3600) with Hawaii ($3478) right behind.  The top and bottom 10 are listed below.

Top 10 States with Highest Taxes Per Capita 

1.  Vermont             
2.  Hawaii               
3.  Wyoming          
4.  Connecticut       
5.  Delaware          
6.  Minnesota     
7.  Massachusetts   
8.  Alaska            
9.  California           
10.New Jersey      

Top 10 States with Lowest Taxes Per Capita 

1.  South Dakota     
2.  Texas              
3.  New Hampshire 
4.  Colorado            
5.  Missouri           
6.  Tennessee          
7.  Alabama            
8.  South Carolina   
9.  Georgia            
10.Oregon               

 
Comparing states per capita tax ranking with the party they voted for in the 2004 presidential election, eight out of ten of went Democratic during the 2004 presidential election.  Review of the top ten states with the lowest taxes per capita, eight out of the ten went Republican for the 2004 race. It appears the axiom that Republicans support lower taxes and Deomcrats embrace spending has some truth to it.  Although President Bush is doing his best to disprove this.

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metulj's picture

Correlate

Correlate that with education quality, standards of living, life expectancy, infant mortality, health metrics etc and you will find that most of the states with higher taxes also excel in most social barometers. There are exceptions of course, but I think thats the general trend. Massachusetts public schools are outstanding. Tennessee's public schools, well, are not so good. It is also important to note that as a whole, the US has an infant mortality rate similar to developing countries and not inline (by a long shot) with the rest of the developed world. Why? Lack of a readily available health care system, for one. So, a place like Massachusetts, which is tax heavy, but just mandated that everyone in the state must have health coverage should see a drop in infant mortality.

Still, Tennesseeans have extra bucks in their pockets to put toward a nice boat to run around on those federally subsidized lakes and what not. Smoke 'em while you've got 'em...

bostonshepherd's picture

I'll challenge the assertion

I'll challenge the assertion that "Massachusetts public schools are outstanding."  Let me clarify that, living in Boston, MA.  Some MA public schools are outstanding.
 

But many are simply a disaster.  This state's public school system is highly bifurcated.  Typically, schools in high property-value towns are excellent, but there are many school systems which border on dysfunctional – Springfield, New Bedford, Fall River, Haverhill.  Some would include the city of Boston on that list.

Rich suburban towns spend upwards of $10,000 per pupil.  In TN, you likely could enroll everyone in a private school at those prices.  Cambridge – a mix of wealthy and lower middle incomes – spends more than $13,000.

I would instead look at a state like New Hampshire which consistently drubs MA when measured by a broad array of educational metrics…and they spend around $6,000 per student.  They rank 48th on the per capital state tax burden list.

And don’t get me started on the Massachusetts Teachers Association.  Their sweetheart pension deal is going to sink this state financially (with help from all the other public sector pension plans.)

And don’t get me started (#2) on the recently passed health insurance “reform.”  It’s a blueprint for TennCare, Massachusetts style.

If things were so great here, if our taxes actually bought something of value, we wouldn’t be losing population (net loss of 3,000 in 2004, and 17,000 in 2005.)  Where’s everyone going?  Low tax states of NH, FL, TX, the Carolinas, some to CA, and some to … TN!

Anyone from TN moving to MA?! 

Andy Axel's picture

Nah.

Anyone from TN moving to MA?!

I just buy stuff from Massachusetts online so I can avoid paying Tennessee's unconscionable 9.25% sales tax.

Besides that, it's good to have a team in the Stanley Cup playoffs.

____________________________

Floating face down in my NCAA pool.

bizgrrl's picture

Puhleese...

70% of the states with the highest taxes have Republican governors (including the 2 states with the highest taxes). 70% of the states with the lowest taxes have Republican governors (including the 2 states with the lowest taxes). I think you need a better argument. Apparently how people vote, Republican or Democrat, does not necessarily relate to taxes in their state.

Pfftt...

Update: maybe higher taxes is related to education. The states with higher taxes have a higher rate of high school graduates then states with lower taxes.

Volvosnlattes's picture

Weak attempt, CG

The good Dr. Bill Lyons has warned of drawing conclusions from uncorrelated data.  In addition to ignoring a zillion quality of life metrics that embarrass states like ours, CG also ignores how much drain various states are on the federal governement.  Many low tax states don't pay their own way, getting more money in fed. dollars than they pay in.  As this article puts it:

If you think of Red America as stubbornly self-reliant and Blue America as a drain on the Treasury, you've got it exactly backward.

Do all selfish Repugs hate America?

Eleanor A's picture

You know

I'd just really like to know why the national Democratic Party can't seem to get it together enough to point out exactly what Republicans are: selfish freeloaders who don't want to pay their own way. Oh, and who want to tell everyone else what to do in the privacy of their own homes.

Opinari's picture

From a High Tax State to a Low Tax State...

"If things were so great here, if our taxes actually bought something of value, we wouldn’t be losing population (net loss of 3,000 in 2004, and 17,000 in 2005.) Where’s everyone going? Low tax states of NH, FL, TX, the Carolinas, some to CA, and some to … TN!"

And TX... #2 on the list. I lived in CT just south of Springfield, and it just became too punitive to live there. It's not selfishness that motivates many people to move to cheaper locales. It's sheer survival. Providing for a family of four in New England became practically impossible.

Volvosnlattes's picture

Be serious

Opinari, do you attribute the cost of living in those "other" states to high taxes?  Or is it the cost of everything, like housing (especially), groceries, energy, etc.--some of this being due to better paying and more plentiful jobs there?  In other words, could it possibly be mostly due to the economic forces of supply and demand--you know, the beautiful free market?

metulj's picture

Alternative Minimum Tax

Or as I like to call it: "The Blue States' Alimony Payment To Mississippi."

Opinari's picture

Cost Of Living.

"Opinari, do you attribute the cost of living in those "other" states to high taxes? Or is it the cost of everything, like housing (especially), groceries, energy, etc.--some of this being due to better paying and more plentiful jobs there? In other words, could it possibly be mostly due to the economic forces of supply and demand--you know, the beautiful free market?"

I certainly am serious. My property taxes alone were three times that of what I pay here in Texas, and Texas has pretty substantial property taxes because it is how the public schools are funded. Texas also has no income tax. Connecticut was 6.5%. Connecticut charged property tax on my vehicles. Texas thinks that is bloody ridiculous. My tax burden in the Nutmeg State was so excessive, I'd be hard pressed to ever return there.

Now, to your point, high taxes are not the sole driver of cost of living. That is not what I meant to imply. I am, however, saying that when I looked at my bottom line, excessive taxation is what motivated me to relocate.

And a caveat. I am fairly certain that the job situation is as good here if not better, at least in the information services sector. Firms from Austin and Dallas practically have to beg people to interview with them. In Connecticut, the opposite was true, at least when I lived there.

metulj's picture

Come on.

"Opinari: I certainly am serious. My property taxes alone were three times that of what I pay here in Texas, and Texas has pretty substantial property taxes because it is how the public schools are funded. Texas also has no income tax. Connecticut was 6.5%. Connecticut charged property tax on my vehicles. Texas thinks that is bloody ridiculous. My tax burden in the Nutmeg State was so excessive, I'd be hard pressed to ever return there.."

Please see my Alternative Minimum Tax quip. It is a fact that Blue State tax payers subsidize a vast swath of America, especially in terms of infrastructural expenditures and welfare payments funded by federal taxes. I live in New York City. The City receives very little some years and most years pratically none from the federal government and is habitually underfunded by Albany. NYC is still waiting on the bulk of the 9/11 money it was promised. Wyoming and Mississippi sure as hell got their money most rikitik. Now where did the attacks occur?

If the City were to secede from New York State (there are people who are proponents of this!), New Yorkers tax burdens would drop. If it would go ahead and declare itself a seperate nation (there are proponents of this!), New Yorkers tax burdens would drop again.

 
I went to a fascinating panel discussion at CUNY grad center that examined the political economy of New York City in relation to the rest of the nation. An underlying theme is that, basically, New York is the wetnurse to at least the rest of New York State, who hate the City, and that everytime we get a paycheck and see that non-refundable NYC Income Tax (Yep!) it is there to subsidize upstate farmers who produce NOTHING toward the state's GDP in balance and broken mid-level cities like Buffalo, Rochester, Poughkeepsie, etc. Add the fact that I see no benefit from my federal taxes in the place I live, I can assume that every dollar I spend in federal taxes has a certain portion that goes as a direct transfer to places like Tennessee where instead of going toward education, social services and, it goes toward neverending road widening projects and other boondoggles.

Pack in the Alternative Minimum Tax which is designed to take even more from middle-class taxpayers in high cost-of -iving Blue States and transfer it to elsewhere in the country, and it approaches intolerable. Move, you say? Nope. Get off our tit and pay your fair share, the Blue States say.

 

Eleanor A's picture

Dream on, metulj

Republicans aren't ever going to do that. Why? Because they'd rather whine about taxes than pay their fair share. And you see it all over our public discourse and consumer practices, which dictate more and more of what happens in this country.

As long as people are being paid 3 cents a month to manufacture cheap goods from China, they're happy. And nobody better mess with their Wal-Mart.

Too bad the Chinese standard of living will be here pretty soon, thanks to folks like them. Wonder how many of them saw last night's Frontline, which went into detail on the economic and political oppression taking place in the country with which our ruling corporations made their deal with the devil.

You know people there aren't allowed to live in cities? Their workers are bused in, without their families, and made to live in dormitories. What really bugged me, though, is how Yahoo and Google are helping the communist government find and punish those guilty of thought crime.

But, it doesn't matter to Mr. Blount County, who wants to make sure he can still drive his 12 mpg urban assault vehicle. Hope he enjoys it while he can.

Opinari's picture

"It is a fact that Blue

"It is a fact that Blue State tax payers subsidize a vast swath of America, especially in terms of infrastructural expenditures and welfare payments funded by federal taxes."

On a federal level, that is a plausible contention. I would argue that you just made a good case for shrinking the federal government as a whole, and letting states decide how to raise money and allocate resources.

"Pack in the Alternative Minimum Tax which is designed to take even more from middle-class taxpayers in high cost-of -iving Blue States and transfer it to elsewhere in the country, and it approaches intolerable."

I couldn't agree with you more here. The AMT is reprehensible and needs to be deprecated, along with most of the cumbersome, loophole-filled Federal Income Tax code.

Volvosnlattes's picture

Now we know

I would argue that you just made a good case for shrinking the federal government as a whole, and letting states decide how to raise money and allocate resources.

Now we know your perspective.  What would you propose the federal government cut and how could this be realistically accomplished?  Keep in mind the huge amount of non-discretionary payments the federal gov is req'd to pay and the astronomical (and absurd) cold war-style defense budgets still championed mostly by the GOP, not to mention $200 million per day (off the books) to support W's war.  We see the results of "starve the beast" fed. governance.  After all, "Reagan proved deficits don't matter," right? 

God help us if states were left to their own devices to decide what's best for us.  (If only the present GOP congress and SCOTUS, and the Bush admin stuck to their advertised principles and allowed states to do just that when the states have tried.)

As for the economy of Texas, how much cheap labor does it depend on "undocumented" workers to fuel its growth?  And do you really think the state of Connecticut, say, could soak residents in taxes without realizing the damage it would do to the economy?  As long as the state doesn't suffer economically overall, which I don't see happening though I may be wrong, wouldn't such taxes be faithfully serving the rules of supply and demand?  For example, CT taxed your vehicle because it could.  There are enough vehicles there to cause severe burdens on society.  Taxing them forces those responsible to be accountable for the impacts they inflict.  (Personal responsibility: remember that concept the GOP used to tout when it made political sense for them to?)  If enough people moved or if there were another economic toll resulting, such as from a recession caused by auto dealers not being able to sell cars due to the high cost of car ownership, then they'd sooner or later figure it out and lower/reduce such a tax.  Or suffer.  Is that state's economy suffering to such a degree from this tax?

Opinari's picture

Punitive Taxation.

"Is that state's economy suffering to such a degree from this tax?"

A single tax is not likely to cause a great deal of economic suffering, but a culture of punitive taxation meant to regulate behavior and redistribute wealth can, and does.

From my perspective, I can only say that the idea of paying $500 or more per year just to own a vehicle did preclude me from making a purchase, yes. The costs outweighed the benefits.

"What would you propose the federal government cut and how could this be realistically accomplished?"

My point was that, if "fair distribution of wealth" is the goal, then states should be the ones making fiscal decisions, not the Feds. Why not allow states to decide what policies best fit their goals? Even if you disagree with that notion, you can't argue that the "blue state alimony payment" would cease to exist, since the Feds would no longer be involved. That seems to be the ideal way to force the Red States to pay their own way.

But, since you asked, I would propose that the .gov return to their original Constitutional mandate: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Let the Federal Government do the things delegated to it, and let the States do the rest.

"And do you really think the state of Connecticut, say, could soak residents in taxes without realizing the damage it would do to the economy?"

When I left the area, I failed to see any politician, Republican or Democrat, who gave a rat's squeak about whether or not taxation adversely affected the economy. I know that jobs were hemorrhaging, people were relocating, and the middle class was shrinking on a daily basis. I know that when businesses left the area for more business-friendly states, politicians blamed anything but punitive tax rates for those losses. Connecticut imposes both a franchise tax and a business tax on corporations. The state's major employers, insurance companies and manufacturers, have been leaving at every opportunity. Suffice it to say that not many new operations were sprouting up in the area either, at least not while I was living there.

All of this is to say that a little bit of taxation never hurt anybody, but the confiscatory levels that have been reached in states like Connecticut are overkill.

Eleanor A's picture

Would that more Republicans

would toe such a line. As it stands, many economists are anticipating a bear market, thanks to the Bush Administration's fiscal profligacy.

But no, we have to hand contractors in Iraq another $100 billion to waste every six months or so. I'd agree that too many of our tax dollars are going in the wrong direction.

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