Tuesday, June 09, 2009

This post would have been much easier to write a year or two or ago.

But somewhere along the line, I decided to stop being quite so freewheeling with the insults. So, I'll assume that Mark Singletary puts more time, energy and effort into editing the content of his paper than into writing his commentaries. I thought that last week's was pointless (see comment 4), but this week's commentary isn't much better:
Louisiana spends more than $6,500 per resident each year. That number is based on 2007 data from the Tax Foundation, an independent research center. We rank 10th in per-capita spending when compared with other states.

Florida and Texas, ranked 49th and 50th, spend the least per resident. It’s fair to assume that quality of life issues aren’t tied directly to government spending. Most polls show Texans and Floridians are fairly happy about where they live.

Our closest neighbors all spend less than we do, as well. Mississippi, our dirt poor closest neighbor, ranks 13th at around $6,400 per resident and No. 29 Arkansas spends $5,300.

Not that I could think of any reason why Louisiana and Mississippi might have spent more per capita in 2007 than in previous years, but I decided to take a look at the National Tax Foundation's website anyway. Unfortunately, I couldn't find any earlier years.

Because Louisiana ranked tenth in state spending per capita in 2007 (according to the tax foundation), Singletary seems to have made an unfounded assumption about our per capita tax rate:
We tax ourselves excessively, yet we accept sub-par services from state government.

Not according to the Tax Foundation:
Estimated at 8.4% of income, Louisiana's state/local tax burden percentage ranks 42nd highest nationally, well below the national average of 9.7%. Louisiana taxpayers pay $3,286 per capita in state and local taxes.

Of course, the figure given is for state and local taxes, while Singletary was talking about state taxes. According to the U.S. Census Bureau Louisiana ranked 36th in per capita state taxes* in 2005. Also, I was being sarcastic in the middle paragraph.

On second thought: Singletary does make one or two good points, but he misses a big point. I'll add more tonight.

* The Tax Foundation ranking is as a percentage of income, the Census Bureau ranking is according to dollar amount per capita.

All that means is that Texas and Florida have much higher per capata incomes, which seem obvious.
Forget trying to compare averages, the bottom line is this:

Houston: No state income tax, 8.3% sales tax.

New Orleans: 6% state income tax; 9% sales tax.

Now, property taxes are indeed higher in Texas, but then they tend to be fairly high for new homebuyers in New Orleans as well. So in the end, Louisiana is doing a pretty poor job of being tax-competitive with Texas and Florida.

The question is, what do we do about that? Do we try and find a way to eliminate the state income tax, or do we hold firm or even raise taxes further?
Actually, my main point was that it's foolish to base an argument on one set of numbers by the Tax Foundation or any other group. In this case, it was particularly misleading because much of the federal recovery in both Louisiana and Mississippi was probably counted as state spending, even though it came from federal sources.

As a general rule, I think that people tend to either put too much faith in numbers from studies like the one that Singletary quotes, or they dismiss them altogether (which is a mistake, unless they're obviously manipulated). In the case of the Tax Foundation, too many people, especially on the left, tend to quote its donor state numbers unquestioningly, without looking at how it arrives at those figures. I think it uses some questionable assumptions.

Karen, I'll try to get get in a couple of posts before I go on vacation Friday. I tend to not even sit down in front of the computer until about 9 this time of year, and since I get easily distracted, it can take me a long time to look up links. I'm not an angry person in everyday life, but I tend to blog about things that piss me off. I got tired of starting blog posts at 11 at night about things that are going to cause me to go to bed angry. The obvious answer is to look up the links one night and write the post the next, but I've just looked up a lot of links without getting around to the posts. I did leave a comment on your blog recently, but I kinda signed my name sideways or backwards. My real name, not my blog name.
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