Wednesday, August 12, 2009

When Does Your State Let Up on Your Taxes?

Americans for Tax Reform have published a fiscal breakdown calculated on a Cost-of-Government-Day (COGD) for each of the fifty states.

These costs include the “varying government burdens suffered in each state”. As the site says, … “federal tax and spending burdens are a large contributing factor. These federal burdens vary because relatively higher burdens are borne by states with relatively higher incomes”.

The Baron has dtevised a color-coded map of all the states which illustrates how hot your tax rate is. Alaska is quite cool; they get to go out and play as of July 11th every year. Poor Connecticut misses lunch and recess, but it does finish up by September 7th, which leaves a little time to have some fun before supper. Whadda drag for Connecticut, California, New Jersey and New York. Well, you kind of expect that with New Joisy.

Does anyone have the corruption figures for the fifty states? We know they all have some, it’s just that there are relatively cleaner places.

Ah, how the Road to Hell is paved with such good intentions, especially when the Pooh-Bahs are using OPM - other people’s money.

Cost of Government Day

Evidently, things don’t change much from year to year, including the exit rate of some high-cost states’ inhabitants. Old hands at this, the Americans for Tax Reform say:

As in previous years, the latest Cost of Government Day is in Connecticut, with the average worker toiling all the way until September 7 to pay off all the costs of government at each level. The dubious honor of second place is held by New Jersey, with COGD now falling on September 6. New York is right behind on August 31, followed by California and Maryland.

I have had email discussions with some denizens of New York state and of California who say they simply cannot afford to live in those states anymore.

Remember the old saying regarding the three most important things about real estate: “location, location, location”. Well, that’s changing: the most important question for the middle class is “how much is the tax rate in this burg?”
- - - - - - - - -
For the rich, the real estate and personal property tax rate is not a serious consideration, though the state income tax may have some bearing on their decision. At the very least it will give them something to complain about at cocktail parties.

For the poor, the tax rate is important only to the extent it affects affordable rental housing. The bottom line for the indigent and those near poverty level is “how much will the state grant me in housing, food, and health benefits”?

You will notice, however, the link between the two. That is, the state and localities which provide more benefits also have a heavier tax hand lying across the backs of the taxpayers.

The table ranks each of the states and tells you on which date you are free of the tax encumbrance and the money that you earn begins to belong to you.

If you live in a state where unions rule, where welfare benefits are generous, and where anything that can be taxed has a bite taken out of it, then you could work for nine months to service your state’s burdens.

To some extent, this depends too on where you live in the state. For example, in Virginia, which is where we live, the people in the northern part of the state - closer and closer to the federal government - pay more for everything. That’s why, when the federales retire, they move to the southern part of the state.

And Heaven knows, we do have more than our share of retired state department mojos, driving up real estate prices in chi-chi places like Charlottesville. They have those fat government pensions and their money goes a long way here compared to what it would cost them to stay in congested, over-built Northern Virginia. Meanwhile, municipal employees in towns like Charlottesville, where these people retire, can’t actually afford to live there themselves. They’ve been crowded out by government largesse and all the tax-free land the government-funded University of Virginia swallows up.

On a related note, a friend from high school sends me interminable forwards. I’m sure you get your share of limp jokes and wildly improbable stories. Mostly I simply delete them but this particular missive fits in with my post, though I haven’t checked her figures for accuracy. However, I’ve noticed that when it comes to the spoils system, it pays to believe the higher figures.

She complains:

Perhaps we are asking the wrong questions during election years.

Our Senators and Congresswomen do not pay into Social Security and, of course, they do not collect from it.

Social Security benefits were not suitable for persons of their rare elevation in society. They felt they should have a special plan for themselves. So, many years ago they voted in their own benefit plan.

In more recent years, no congressperson has felt the need to change it. After all, it is a great plan.

When they retire, they continue to draw the same pay until they die. Except it may increase from time to time for cost of living adjustments.

For example, Senator Byrd and Congressman White and their wives may expect to draw $7,800,000.00, after retirement with their wives drawing $275,000.00 during the last years of their lives. [Actually, Senator Byrd will be carried off the Senate floor in a pine box, so I’m not sure he counts - D]

Younger Dignitaries who retire at an earlier age will receive much more during the rest of their lives.

Their cost for this excellent plan? Zero. Nada. Zilch…at least for them. You and I pick up the tab for this fine plan, which is paid directly from the General Funds.

From our own Social Security pension plan, which you and I pay (or have paid) into every payday until we retire, the average worker can expect $1,000 per month after retirement. And that pension will be taxed, again thanks to our diligent Congress.

Or, in other words, we would have to collect our average monthly benefit for 68 years and one month to equal Senator Bill Bradley’s yearly draw.

The point of her rant was that by removing themselves from the equation, our fine political class has no motivation to fix Social Security. And she’s right. It’s the same with ObamaCare: whatever convoluted “allocation of scarce resources” they devise, the final Frankenstein’s monster that limps out of Committee will have no bearing on them. They will continue with their own special, taxpayer-paid health plan.

Not for nothing are they known as the Imperial Congress.

The Center for Fiscal Responsibility’s website is a wealth of information.

Here is the Taxpayer Protection Pledge:

Fiscal accountability’ revolves around two components of government finance: Taxes and Spending.

While many of the tools the Center for Fiscal Accountability promote focus on accountability in spending, Americans for Tax Reform has a long standing track record of promoting and achieving greater accountability on the tax side through its flagship:

The Taxpayer Protection Pledge.

The Pledge, a commitment made by elected officials and candidates for public office never to raise taxes, was created by Americans for Tax Reform at the request of President Reagan in 1986, and has since become de rigueur for Republicans seeking office, and is a necessity for Democrats running in Republican districts. Numbers in Congress are approaching 50% in each house.

Politicians often run for office saying they won’t raise taxes, but then quickly turn their backs on the taxpayer. The idea of the Pledge is simple enough: Make them put their no-new-taxes rhetoric in writing.

In the Taxpayer Protection Pledge, candidates and incumbents solemnly bind themselves to oppose any and all tax increases. While ATR has the role of promoting and monitoring the Pledge, the Taxpayer Protection Pledge is actually made to a candidate’s constituents, who are entitled to know where candidates stand before sending them to the capitol. Since the Pledge is a prerequisite for many voters, it is considered binding as long as an individual holds the office for which he or she signed the Pledge.

Today the Taxpayer Protection Pledge is offered to every candidate for state office and to all incumbents. More than 1,100 state officeholders, from state representative to governor, have signed the Pledge. Statehouse tax-and-spend interests have to contend with Pledge signers in every state.

Go here to see if your representative and senators have signed the Pledge. Ours, Congressman Tom Perriello, has not.This is just one more target of opportunity with which to bring the man to justice.

Out of one hundred senators, only thirty-four have agreed to fiscal responsibility. Neither of Virginia’s high flyers have bothered signing on. How can you have fiscal responsibility when you’re busy signing away the future of the country?

Senate Members

AL Richard Shelby NE Mike Johanns
AL Jeff Sessions NE Ben Nelson
AK Lisa Murkowski NH Judd Gregg
AZ John McCain NV John Ensign
AZ Jon Kyl OK Tom Coburn
FL Mel Martinez OK Jim Inhofe
GA Saxby Chambliss PA Arlen Specter
GA Johnny Isakson SC Lindsey Graham
ID Mike Crapo SC Jim DeMint
ID Jim Risch SD John Thune
KS Pat Roberts TN Bob Corker
KS Sam Brownback TN Lamar Alexander
KY Mitch McConnell TX Kay Bailey Hutchison
KY Jim Bunning TX John Cornyn
LA David Vitter UT Bob Bennett
MO Kit Bond UT Orrin Hatch
NC Richard Burr WY Mike Enzi

If your elected government servants don’t appear on this list, you might want to send them a warm letter of regards, outlining their chances in the next election when their failure to sign on for fiscal responsibility comes to light.

This list represents 34 per cent of our current Senate. So SIXTY-SIX per cent — two thirds — of our Senators don’t care. They need to get on board or the train needs to leave without them.

Here’s another factoid that the Americans for Tax Reform group has shot full of holes:

U.S Govt. Spends MORE Taxpayer Dollars on Healthcare Per Person Than ANY Major Developed Country, by Tim Andrews

ObamaCare proponents have long decried the “failure” of free market health care in the U.S. “If only we had more government money” they said! If only we could throw some more taxpayer dollars at it then everything would be okay! The free market has failed, so we need government to step in!

We have a free market in healthcare in the U.S at the moment?

Yeah, right.

In fact, the U.S Government spends more per person on healthcare than any other major developed country.

I repeat. Per person, when it comes to healthcare the U.S Government spends more per person than pretty much any other government. This isn’t total spending. This doesn’t include insurance or individual payments. This is government spending. Only. These are OUR tax dollars. And we have more government involvement in health than any other major nation. [my emphasis - D]

This is NOT a free market. This is a clear case of government failure.

If ObamaCare is enacted, we will be spending close to $4,000 in taxpayer dollars - in the most inefficient way possible. We already spend more taxpayer dollars than Europe on health, and it clearly hasn’t work.

At the moment, the U.S has a world class private system, but also with government muddying the water, interfering, and creating the many problems that currently do exist.

The solution is NOT to do more of that which has failed. Rather, is it to take advantage of what works: the market.

The solution is NOT more government - it is less…

NOTE: click on the link to see his graph.

Let’s face it: we have a bunch of money-drunk free spenders running our government. This is a top-down problem in Washington, D.C. but it has a bottom-up solution here in the hinterlands.

We need more than a tea party or two: we need concerted, smart organizing, things the average person can do, even if they work two jobs to keep government paid and happy.

Here’s one effective move you can make. It will cost some stamps, some paper, maybe some emails. Emails are quicker, but snail mail to their local hiding places offices would be more effective. Imagine if your “representative” (your current crook in the district seat) got a few hundred of these (pdf) from his constituents? Just fill in his name for him so he knows who you’re talking at.

The only necessity on your part would be printing out the form and sending it. There are forms for your Senators, Governor, and state Representatives (all pdf files).

This could grow. Your five letters (two Senators, one Congressman, one Governor, and one state representative. With the cost of printing those five pdf pages plus 5 envelopes, 5 stamps, and about fifteen minutes, you could start a paper avalanche…I hate chain emails, but send five individual invitations to others to do the same.

Democrat or Republican, we’re all getting killed with taxes. No need to mention partisan projects, just express your concern for our future citizens. You’d better include the pertinent addresses for these pledge papers. It’s human nature to be lazy.

Heck, maybe some businesses would let you leave a stack of these in their store (with the address listings attached). Locally owned businesses are really hurting, thanks to the federal overreach.

It didn’t start with this administration, but this is as good a place to stop as any.

Go on, be a citizen. You’ll feel better.


Hat tip: The Lurker from Tulsa

8 comments:

William Woody said...

The table didn't make sense because it would imply that for Connecticut the overall tax rate for both state and federal would be 68% of Gross State Product, and for the US the overall tax burden would be 61% of GDP. And that strikes me as rather high, since the tax burdens of Europe is generally in the 50ish range.

Then I found this page: Cost of Government Day Components

This chart is adding regulatory burdens suffered at the Federal and State level with the tax burden--effectively adding apples and oranges. It's not to say that regulatory burdens (including the paperwork overhead of SOX compliance and the overhead of EPA Environmental Impact Statements) aren't onerous and often used as an excuse for special interest groups to clobber the hell out of folks who are committing the vicious crime of trying to make a living. And it's not to say that taxes aren't way above the optimal point on the Laffier curve. Nor is it to say that government intrusion into individual liberties is at an absurd all time high.

But the statistics offered by the aforementioned paper are bogus because they are adding two things that have little to do with each other: taxes and regulatory burden.

Henrik Ræder said...

The corresponding Danish tax freedom day was July 17th this year. Which I used to think was pretty bad...

Anonymous said...

Hahaha. Cost of government day is September 7 for Connecticut ? August 17 for Virginia ? And August 12 for the whole of America ?

That's when we get even with all those nasty Jerry Lee Lewis remarks.

Why don't you relocate to France, Baron and Dymphna ? Our own COGD is July 15 this year. And yet, there are plenty of us who are mad as hell about it...

http://tinyurl.com/Contribuables-Associ-s

Baron Bodissey said...

Robert --

Yes, that would be nice. I would at last be able to drink Bordeaux at reasonable prices!

Seriously, though...

Correct me if I'm wrong, but I don't think the European version of "Cost of Government Day" takes government regulation into account.

That's what makes this particular analysis different: it attempts to assign a cost to regulation. The earlier versions, which just included federal, state, and local taxes, generally gave us dates in May or June.

The EU regulates economic activity MUCH more heavily than the USA (although Hussein is trying to change that). I'll wager that if government regulation were included, most Europeans would celebrate "Cost of Government Day" on about December 12th.

Anonymous said...

Baron : indeed. I agree with William Woody.

It's intellectually dishonest, and statistically dubious, to add the cost of regulation to the amount of tax.

The cost of regulation exists, and it can be very important. But it's obvious that a) it's a different notion from tax, b) it's exceedingly difficult to evaluate, contrary to tax.

Joking aside, it's probably the reason why Denmark and France come out, in a counter-intuitive way, seemingly worse off than America in those statistics.

I don't know if the cost of regulation is included in the French calculations, but, in the absence of any information to that effect, we should probably assume that it is not.

And of course you are kindly invited to share a nice bottle of Bordeaux if you come to our coasts, even without an immigration status.

Henrik Ræder said...

Correct me if I'm wrong, but I don't think the European version of "Cost of Government Day" takes government regulation into account.

That is correct. The European equivalents are only concerned with open taxation, not with other burdens of big government.

Dec. 12th? October 31st may be more accurate :)

Dymphna said...

The intellectual part is not of great concern to me right now, given the economic turmoil and level of unemployment in our country. I don't want to become part of a state in which our basic security rests on working for the government...and if Obama has his way, that is what we will become.

My interest is indeed in the heavy hand of regulatory demands a given polity uses to control economic movement in its territory (In that, I agree with Frederic Bastiat. France definitely produced the greatest economist the world ever had).

As a homely example, how many layers does the average citizen have to go through to, say, open a business or put an addition onto his house?

That is definitely an economic burden that needs to be taken into account. Here in the US, where people can, they tend to ignore the regulations. Where they can't, they pay the absolute minimum lip service. de Tocqueville figured us out very well.

If Obama has his way, under the Cap and Trade bill which has passed the House, we will become severely un-free. Washington will regulate things all the way down to the individual's house and car.

For example, friends who've lived abroad have described the red tape involved in having a plumber come to do repairs. Here, you can hire a jack-of-all-trades to do the plumbing, a little wiring, some woodwork, window glazing, painting and whatever else needs a hand. You pay him and he settles up with Uncle Sam.

If you're doing an addition, you get a permit from the county and that involves inspectors, which delays the job sometimes.

How many days does it take in France to get a business up and running? The answer to that question impacts you directly whether or not you're aware of the cost.

Here's a list which includes each country's previous ranking:

Index of Economic Freedom World Rankings

Hong Kong is first.

There are seven "free" countries, with rankings from 100-80%. After HK, follows

2. Sinagpore
3. Australia
4. Ireland
5. New Zealand
6. USA
7. Canada

The next category,"mostly free" goes from 79.9 - 70%. Denmark leads and the countries listed go from #8 thru #29.

The third category, "moderately free", have met the scores between 69.5 - 60%. The countries listed in that group go from #30 thru #83.

As a matter of interest, France is #64, sandwiched in between Uganda and Romania.

Here's a more detailed breakout of the listing for the top ten:

Detailed Index of Economic Freedom World Rankings, Top Ten.

Taxes count, but they are not the only factor to take into consideration when totting up economic freedoms and burdens.

Denmark is #8, but its freedom from ccorruption is 94%, the US only 72. Denmark's labor freedom is 99.4. Only Singapore is higher.

Henrik R Clausen said...

I agree with Frederic Bastiat. France definitely produced the greatest economist the world ever had.

Dymphna, I beg to differ. I believe Austria did.

He was a philosopher, too. In his refutation of Socialism (along with Syndicalism and a few other stupidities), I found an interesting chapter on sex and marriage, in a male dominated society vs. a modern society where marriage is a form of contract in the private sphere. Some extracts below. I don't think he lent even one thought to Islam when he published this in 1922.

Oh. The Mises Institute has decided that copyright is stupid (as in uneconomical) and decided to give away electronic copies of all his books - and everything else in their catalogue - for free.

Now for some extracts from pages 87 through 107 of 'Socialism'. I'm flaunting the 500 word limit here - please feel free to use this as a post instead.

Unlimited rule of the male characterizes family relations where the principle of violence dominates. Male aggressiveness, which is implicit in the very nature of sexual relations, is here carried to the extreme. The man seizes possession of the woman and holds this sexual object in the same sense in which he has other goods of the outer world. Here woman becomes completely a thing. She is stolen and bought; she is given away, sold away, ordered short, she is like a slave in the house. During life the man is her judge; when he dies she is buried in his grave along with his other possessions.

[...]

When the wife granted the utmost favours to another the husband were injured. However eagerly he himself set the favours of other women, he would not tolerate interference with his property rights, he would not hear of anyone possessing his woman. This is a conflict based on the principles of violence. The husband is offended, not because the love of his wife is directed away from him, but because her body, which he owns, is to belong to others. Where, as so often in antiquity and the orient, the love of man sought not the wives of others but prostitutes, female slaves, and love-standing outside society, a conflict could not arise. Love forces the conflict only from the side of male jealousy. The man alone, as owner of his wife, can claim to possess completely. The wife has not the same right over her husband. In the essentially different judgment bestowed upon the adultery of a man and the adultery of a woman and in the different manner in which husband and wife regard the adultery of one another, we see today the remnants of that code, which is otherwise already incomprehensible to us.

[...]

Under such circumstances, as long as the principle rules, the impulse to love is denied an opportunity to develop. Banished from the homely hearth it seeks out all manner of hiding places, where it assumes queer forms.

[...]

Where the principle of violence dominates, polygamy is universal. Each man has as many wives as he can defend. Wives are a form of property, of which it is always better to have more than than a few. A man endeavours to own more wives, just as he endeavours to own more slaves or cows; his moral attitude is the same, in fact, for slaves, cows, and wives. He demands fidelity from his wife; he alone may dispose of her labour and her body, himself remaining free of any ties whatever. Fidelity in the male implies monogamy.

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