Tuesday, December 30, 2008

Take Five

1. B. knocks me around a bit for yesterday's post in which I suggest that Tennessee's lack of a state income tax may have something to do with the state's economic strength relative to other states:

Roger says:

the lack of a state income tax is indeed a major reason for Tennessee’s relative economic strength. By the way, why is it that some of the most highly taxed states in the nation are the ones with their hands out? Check the lineup: New York, New Jersey, California…I don’t get it. They have “progressive” tax systems with income taxes. Everybody’s paying their “fair share.” Everything should be hunky-dory. What could possibly be the problem? More to the point, why is it supposedly somehow our (”our”= people who do live in those states) problem?

And I have just two points.

1. You’re lucky Rachel isn’t here, buddy, or I’d totally have her tracking down those studies that show that places like New York put more into the federal coffers than they take out, unlike us.

2. Relative economic strength? Ha, ha, ha. Check this out. When you’re trying to build a hill “Our hole is smaller than yours” is kind of beside the point.

Well, first of all, a minor quibble: I doubt this was done in bad faith, but B. left my opening hedge out of my statement, which was "It's not the only reason, but..." which I think makes my statement a little less strong than it may have seemed from her end.

But, in any case, I'll try to address her general points:

I think we have a little bit of an apples-to-oranges problem here. B. seems to be focused on the fiscal health of state governments only, while Matt Kisber--and, by extension, me--focused on general economic health. The two aren't the same, anymore than, say, the Dow Jones Industrial Average and the national economy are the same (though one of the unfortunate effects of the Crash of 1929 has been to equate these two things in the American zeitgeist). There is a relationship there, certainly, but, again, they are not the same. Out-of-whack government budgets and vibrant economies are not necessarily mutually exclusive things. Nor does an in-the-black government budget always necessarily ago hand-in-hand with a healthy economy.

With regard to the oft-discussed issue of dollars-into-the-federal-budget-versus-dollars-out, I'll send the reader back to the last paragraph, but also add that a lot of that largely depends in the first place on what dollars you're counting, in the second place on the efficiency of the use of those dollars, and in the third place on how you measure the actual economic effect of those dollars. There's probably a fourth and fifth place, too, but we'll stop there for now.

Also, the numbers in those studies are often skewed by relative costs of living differences. For example, New Yorkers, say, may pay more federal income tax dollars per capita than Tennesseans (I'm just guessing here, but I suspect it's a pretty safe bet), but how much of that is due to the fact that per capita income is higher in New York, which is itself driven in part by the higher cost of living in New York?

As for the argument against my use of the phrase "relative economic strength," because almost 44 states are in the same hole, well, again, state budgets are not equivalent to state economies, but, even if they were, we need to remember that one of the central arguments made by pro-state income taxers seven to nine years ago was the this very "relative" argument. That is, that states with income taxes experienced relatively less volatility than those without. Well, I don't have the volatility numbers in front of me, but from that map B. links to, seems to me that having a state income tax doesn't seem to be doing a lot for the vast majority of the 44 states facing shortfalls.

2. Thanks, Mike! That was helpful. You know, a lot of Religious Right types love to call other folks in Camp Republican "squishes." This is apparently considered clever in some circles. May I just say that you couldn't name a bigger "squish" than Mike Huckabee? I know, I know, he talks about God a lot, so that must make him solid, right?

3. Shocker: Ex-hippie offended by Barack the Magic Negro parody of song he wrote. Actual quote: "It is almost unimaginable to me that Chip Saltsman who sent the CD, would seriously be considered for the top post of the Republican National Committee. Puff, himself, if asked, would certainly agree." Emphasis mine. You can't make this stuff up.

4. By the way, no, I'm not a huge fan of Chip Saltsman. Don't dislike him, necessarily, but I do think he's overrated.

5. Quote of the Day:

One of the main points which my liberal friends have a hard time grasping is the conservative anger at George W. Bush for not being a conservative. Faith and hope are important human traits, and pure rationality leads to a sterile and indecisive existence (as evidenced in António Damásio’s work). But all things in modest measures. One can not know the mind of a man, but on many an occasion I have wondered as to the similarity between the cosmic visions of liberal audacity and George W. Bush’s belief that if he believes it is so, it is so.