States broke? Maybe they cut taxes too much

Discussion in 'Politics, Religion, Social Issues' started by Thomas Veil, Apr 3, 2011.

  1. Thomas Veil macrumors 68020

    Thomas Veil

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    #1
    I think this is roughly as surprising as Charlie Sheen's tour bombing.

    Of course, it would fall to one of the smaller media companies to report that not everything is about cutting expenses, that maybe it's a revenue problem as well, if not more so.

    Whether you believe that tax cuts are part of a plan to attack public workers and privatize state functions, or just an unrealistic ideological belief, the fact is if you're not talking about right-sizing your state's taxation level, you're not serious about reducing the deficit.
     
  2. MacNut macrumors Core

    MacNut

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    #2
    If states went into deficits because people didn't have enough money to pay their taxes how will raising taxes solve this problem?
     
  3. Rodimus Prime macrumors G4

    Rodimus Prime

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    #3
    The one in Texas the comtroller (GOP at the time) even toll scumbag Perry that if you cut property tax that for it would come back and be a problem in 2011. He called it. He told them in 2011 the budget would come up short and it was just worse than he said it was because of the tanking.

    It complete BS and proof that the Tea Partier really do not want to do what needs to be done.
    Raise taxes and cut services.

    Well cutting service is on their list of things but we need to raise taxes.

    The kicker is the people DID have enough. The higher taxes really only effect the elite. Cutting services and raise fees hurts everyone else and the poor and hurts 90% of the people compared to higher taxes hurting 10%
     
  4. citizenzen macrumors 65816

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    #4
    Where do you come up with the idea that people don't have enough money to pay their taxes? :confused:
     
  5. NT1440 macrumors G4

    NT1440

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    #5
    Did you read the article at all before posting? :confused:
     
  6. dscuber9000 macrumors 6502a

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    #6
    You mean we can't spend significantly less money on taxes and have the same quality of government? Shocker... :rolleyes:
     
  7. IntelliUser macrumors 6502

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    #7
    Yeah but some states have increased or set taxes virtually on everything and still managed to overspend their budget *cough*California*cough*.
    Gotta find a balance.
     
  8. citizenzen macrumors 65816

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    #8
    I've lived virtually my whole life in California and have no clue what you're talking about.

    Perhaps you can source that.

    As for balance, I'm a big believer in it. In my opinion an "balanced" solution includes tax increases as well as government cuts. Unfortunately, the republicans have fought tooth and nail against tax increases and have tried to balance a 26 billion dollar deficit with cuts. If only they embraced the notion of "balance". :rolleyes:
     
  9. Ugg macrumors 68000

    Ugg

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    I think this mentality is a direct result of the growing income gap in the US. If you pay the peons (lower and increasingly middle classes) less, any tax at all is going to hurt them. When the economy contracts, take away more of what makes a civil society civil and ramp up the continual but false idea that we're overtaxed...

    It's time to take back the asylum.
     
  10. skunk macrumors G4

    skunk

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    #10
    You don't have to be mad, but it sure helps.
     
  11. iJohnHenry macrumors P6

    iJohnHenry

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    #11
    Is this a chink in the armour??

    Am I winning you over?

    :D
     
  12. skunk macrumors G4

    skunk

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    #12
    I have no idea what you're talking about. I was responding to Ugg. :confused:
     
  13. iJohnHenry macrumors P6

    iJohnHenry

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    My senility, of course.

    Just relax, and it will flow over you. ;)
     
  14. codymac macrumors 6502

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    #14
    You mean "she?" We've had women comptrollers for over a decade now.

    The underperforming post-2006 state franchise tax takes the lion's share of the burden here (as called out in the article). It simply isn't compensating for the reduction that was based on it.

    But... that decrease in school taxes has been partially offset by the appraisal districts raising home values since it went into effect. Both the rates and home values have increased in my district since the initial drop. (By 2009 the rate x value equaled my 2005 amount.)

    Sure, it's screwed up, but don't believe Perry's claims that he reduced school taxes as much as he says. That's giving him too much credit.

    http://crosslandteam.com/blog/2006/04/20/texas-property-tax-reform-wheres-the-beef/

    Thanks for reminding me though... I need to file my franchise taxes.
    :(
     
  15. itcheroni macrumors 6502a

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    #15
    The article states that tax cuts have not worked. They seem to be basing that claim on the fact that the states have not seen improvement in their economies after the tax cuts. That is not the correct metric with which to judge the effectiveness of any policy. The question should be whether the economy would have been even worse without the tax cuts. The article does not address this.

    I believe California has one of the highest income tax rates at over 9% for people making over mid-40k. And California has one of the highest sales tax, at 9.75% where I am. And despite this, California has one of the worst budget deficits and some of the most regulations.

    Coincidentally, I've been toying with moving to either Washington or Texas and I've finally decided that it's time. For the cost of taxes in California, I could pay my rent in Washington or Texas for the entire year. And I can't think of one thing the California state government provides that the Washington state government doesn't that I would really miss.
     
  16. Sydde macrumors 68020

    Sydde

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    #16
    How would one find the answer to this?
    The weather sucks big time in Washington state, Texas is much nicer (so I hear). A great many natives of the PNW can become real excretory orifices when they find out you are from California.
     
  17. itcheroni macrumors 6502a

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    #17
    Exactly. I'm just pointing out that it is illogical to draw the conclusion the article did about the effects of tax cuts. The fact that the economy has not improved does not prove that tax cuts were bad for the states that implemented them because we do not know how they would have fared without those cuts. And it is simply a matter of balancing the budget. If they're cutting taxes, they just need to cut enough spending to be balanced. If they expected to cut taxes, not cut spending, and have a balanced budget then stupidity, not the tax cuts, are to blame.

    I'm turning 30 next month and have resolved to spend 6-9 months of the each year traveling from now on. So I really just need a little studio in a chill town for me to relax from all that traveling. So tax benefits are a huge motive for me. I'm going to take a road trip to check out all the major cities once I get back from China. I don't think Texans will take it too hard on me since I'm quite laissez faire, although I will disagree with them on religious and social issues... I'll probably go where the best food and nightlife is.
     
  18. citizenzen macrumors 65816

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    #18
    State Projected FY 2012 deficit (Deficit as percent
    of 2011 spending)

    1. Nevada - $1,500,000,000 (45%)
    2. New Jersey - $10,500,000,000 (37%)
    3. Texas - $13,400,000,000 (32%)
    4. California - $25,400,000,000 (29%)
    5. Oregon - $1,800,000,000 (25%)
    6. Minnesota - $3,800,000,000 (24%)
    7. Louisiana - $1,600,000,000 (21%)
    8. New York - $10,000,000,000 (19%)
    9. Connecticut - $3,200,000,000 (18%)
    10 South Carolina - $877,000,000 (17%)

    13. Washington - $2,500,000,000 (16%)


    A large deficit, yes, But as a percentage of 2011 spending it's not as large as the deficit of Texas, a state you hold up as some kind of model. That's strange, considering they're budget is in worse shape than California. And Washington's hardly a model of fiscal responsibility with the 13th worst deficit.

    As for "some of the most regulations," I have no idea what that really means. Perhaps you could source that claim for me.


    California's sales tax rate is 8.25% any additional sales tax is applied by your local tax district and not the state of California.


    From The Tax Foundation ...

    California is currently ranked 6th in total tax burden at 10.6%.

    If you look at the chart below, California's tax burden has held relatively steady since 1984.

    California has not been experiencing ever increasing taxes, just declining revenues.
     

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  19. Sydde macrumors 68020

    Sydde

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    #19
    30? Then you are not old enough to remember Laffer and Friedman and their bill-of-goods. But surely you have read how they told us with straight faces that cutting taxes would increase revenue. Whether they actually believed it, honestly expected big loop holes to be eliminated, or were just messing with us is not entirely clear. In the end, it all added up to oceans of red ink where before we had ponds, and the economy just keeps getting more unstable. The optimal balance has yet to be discovered, but right now it looks like we are not getting any closer to it.
     
  20. itcheroni macrumors 6502a

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    #20
    I'm just trying to save some money.

    It's clear that California, Texas, and Washington all have bad deficits. Two of them have 0% income tax while one has 10.6%. What conclusion do you want me to draw from this?
     
  21. R.Perez macrumors 6502

    R.Perez

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    #21
    California's tax problems are easy to figure out. The electorate can vote for services separately from the taxes needed to fund them..... that's smart.
     
  22. citizenzen macrumors 65816

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    #22
    I don't want you to draw any conclusion. I was simply trying to correct what I thought were some misconceptions about California.

    You're right that this state does have one of the highest deficits and tax rates for high incomes. However, if you look at the figures, despite the tax rate, Californians still earn more per capita on average than Texans. If you're looking to save money, it doesn't necessarily make sense to move.

    Look at this chart from the Tax Foundation. Texas's total tax burden is 7.9%, 1.9% lower than the national average, yet Texas's per capita GDP is $40,498, $2,041 below the national average. Obviously their lower state tax burden doesn't equate into more wealth for the individual. There are other factors involved.
     
  23. itcheroni, Apr 3, 2011
    Last edited: Apr 3, 2011

    itcheroni macrumors 6502a

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    #23
    If you're taking income into consideration, you also have to input cost of living. And I'm not sure what misconceptions you're referring to. Aren't we in agreement that California has a big budget problem and one of the highest tax rates?

    I'm self-employed, so my location doesn't effect my income. I'm just mainly going to live on the road anyway.
     
  24. hulugu macrumors 68000

    hulugu

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    #24
    However, both the OP and citizenzen's posts show that lowering a state's tax rate doesn't guarantee either high-income for its citizens or create high tax receipts.

    This is a common refrain from conservatives who will often reference the Laffer Curve and will argue that if only a state lowered its taxes, more money would become available.

    You understand that you're probably unique in your circumstances.
     
  25. itcheroni, Apr 4, 2011
    Last edited: Apr 4, 2011

    itcheroni macrumors 6502a

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    #25
    I wasn't making that argument so I guess I was confused why it was brought up. I've only been making an argument that the article can't conclude cutting taxes resulted in the budget problem. A state may have cut taxes and their economy might not have improved since cutting taxes, but the author of the article needs to fill in the gap and explain why there is a correlation/causation. I propose that you could run a state with some income tax or no income tax if the budget was made competently. So, IMO, cutting taxes does not, in and of itself, mean it has caused a budget shortfall. I personally think cutting taxes does help the economy but that's not what is at issue here.

    I have only a general understanding of the theories those guys you mentioned are famous for. I think Austrian economics make much more sense. A theory of how to get the maximum tax dollars out of the people is irrelevant to me. It's like studying how much blood you can drain from people while keeping them alive. My preferred income tax rate is 0.


    I wouldn't have believed it 3 years ago but now I can say from experience that anyone can do it if that's what they want to do. It's all a matter of hard work and willingness to live cheaply. The only thing that might tie you down is a family. I live for traveling so I've just worked my life to be able to do what I like. 3 years ago I was a law school dropout with no prospects and a monthly loan repayment of $1100. The highest paying job I qualified for was tutoring.
     

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