----Hard keeping up, sorry.----
To thine own self be true!
-Dan
Hard keeping up, sorry.
From the Boston Herald:
To an investor it must come as a surprise to hear all this talk of the ``red'' states, which voted Republican last week, as the ``real America'' or the ``heartland.''
And to hear the blue states described as a ``coastal fringe.''
One wonders if the pundits using these phrases have taken a look recently at the stock market.
Or the economy.
The Dow Jones Industrial Average represents the leading companies of U.S. industry across all the major sectors.
At the risk of fueling further talk of secession: Of the Dow's 30 members, 23 are from blue states.
They include ALCOA, American Express, Boeing, McDondald's, General Motors, Intel, 3M, Microsoft and Disney. Some fringe.
Maybe in a modern economy it doesn't make much sense to look at where companies are based. These organizations operate and sell across America and around the world.
Instead we can look at state output or per-capita productivity.
Trouble is, the results are similar.
The blue states remain the engine of the American economy. All in all they produced $5.4 trillion in goods and services in 2001, the last year for which reliable data is available.
That's about $700 billion more than the red states, according to the government's Bureau of Economic Analysis.
It's true that populations are booming across the south and the west. People and companies have moved there in pursuit of cheaper land, lower costs, and fresh opportunities.
You might expect that, as a result, their economies are growing much faster, too. Instead, from 1994 through 2001, the two economies expanded in line with one another. Despite the population shift.
Per person, blue America outproduces red America by 21 percent. That's $6,700 per person per year.
Thinking of secession? Think of the tax cut.
Under current federal tax and spending, there is a massive net outflow of money from the blue to the red states. The blue states pay much more in federal income tax, and receive far less in Medicare, Medicaid, and Social Security - not to mention farm subsidies, highway funds and infrastructure grants.
``The tax money is coming from the blue states, but it's being allocated to the red states because they have lower than average incomes,'' agreed Scott Moody, senior economist at the Tax Foundation think-tank.
The bottom line: In 2002, according to a Tax Foundation study, the transfers amounted to $136 billion.
Economists say that hasn't changed much over recent decades.
For a family of four in blue America, from Portland, Maine to Portland, Oregon, those transfers work out around $3,900 a year.
A tax cut that big would certainly ease the pain of having to show your passport to visit Florida.
Are the red states quite sure they want to roll back big government?
With only a few exceptions, such as Nevada and Colorado, they are all on federal support.
For that matter, are New Englanders being quite so smart in trying to prevent federal budget cuts? Even super-liberals might start to see the advantage of, say, state spending instead.
New Hampshire, Massachusetts and Connectictut are among the biggest net contributors, per person, to the federal government. The costs of the Big Dig notwithstanding.
Maybe this doesn't matter. But it's something to bear in mind - especially if your brother-in-law from Tallahassee tries to give you grief over Thanksgiving dinner
Can't speak for the others, but Redmond, where Microsoft is located, and Everett, where Boeing is located, are two Red Areas...
Who is going to feed you, Blue? Last time I looked FLYOVER country is the breadbasket.
To thine own self be true!
-Dan
Really? Let's say you are correct. How can great 'thinking' people such as yourself, overlook that the bulk of people in the red states who voted for kerry, pay little or no taxes (federal), and are the ones on welfare, food stamps, etc, etc. Take out every single kerry voter out of the red states and the figures will change. Another thing overlooked by you dumb 'thinking' people: California, NY, and many other blue states pay higher taxes in part because salaries are much higher, real estate is much higher, etc. I have a house on a 1 acre lot here in GA, and I bought it for 142k, 5 bedrooms, 3 full baths. What can you get for that in many blue states?
We are the real thinkers, the intelligent ones, the wiser bunch. You people are ignorants full of misguided 'knowledge', amoral, cowards, arrogant and weak.
Those wonderful Dow members you brag on are "headquartered" in blue states that have paid them with special benefits to do so. The real work and the real product still comes from red states so don't try your liberal garbage spew around here. We know the truth - not some rag from Boston.
Some major flaws in this:
"New Hampshire, Massachusetts and Connectictut are among the biggest net contributors, per person, to the federal government. The costs of the Big Dig notwithstanding"
To not include the Big Dig is ridiculous. It is the largest federally-funded infrastructure project in the country. The problem is that when you include it in the figures, suddenly the arguement for the article flies out the window. Sort of like saying, Kerry won, red states not withstanding. Basically, the non-inclusion makes the entire article suspect.
Other problems: Breaking the data down by state. A much more accurate depiction would be by county, as most "blue states" are truly only "blue cities". This also affects the per capita numbers. The problem with this logic is commuters. Many commuters are in red counties while going to a blue city, so productivity number should be adjusted to account for the percentage of commuters driving to another area for work. For instance, Boston has a population of roughly 1/2 million. However, a couple of million people are in the city every day to work. The 1.5 million additional people are not included in the per capita numbers. In Boston this isn't a problem since the Sheeple all vote Dem anyway. In Illinois, that would greatly skew the numbers as Chicago is surrounded by red counties. All of these people are contributing to the production data, but not the population numbers.
You could argue that the red county population commutes to the blue city because they need the job, but you can also argue that production will come to a screeching halt if there are no workers.
News Release
October 7, 2004
Federal Taxing and Spending Benefit Some States, Leave Others Paying Bill: New Mexico gets $1.99 for every dollar in taxes, New Jersey only 57 cents
WASHINGTON, D.C.—Some states feast at the expense of others, according to the Tax Foundation’s latest annual analysis of federal taxing and spending patterns.
All taxpayers know that the federal government uses tax and spending policy to redistribute income from citizens with high incomes to those who make little, but citizens are less aware about geographically based income redistribution.
In a forthcoming Tax Foundation study to be released next week, Senior Economist Scott Moody compares the federal tax burden in each state with Census Bureau data (2003) on federal spending in each state. The result is a ranking of which states got the best deal in 2003 from Uncle Sam’s tax and spending policies. (See data tables here).
Federally Favored States
“During fiscal 2003, taxpayers in New Mexico benefited the most from the give-and-take with Uncle Sam,” said Moody
New Mexico received $1.99 in federal outlays for every $1.00 the state’s taxpayers sent to Uncle Sam. Other big winners were Alaska ($1.89), Mississippi ($1.83), and West Virginia ($1.82).
The District of Columbia’s Special Status
Though not comparable as a state, the District of Columbia is by far the biggest beneficiary of federal spending: In 2003 it received $6.59 in federal outlays for every dollar its taxpayers sent to the U.S. Treasury.
“The District’s share of federal largesse amounted to $60,109 for every man, woman and child,” said Moody. “That’s more than ten times the national average.”
States That Help Others
If some states are beneficiaries, then naturally some must be benefactors—those states where so much is collected in federal taxes that any federal spending they receive is overwhelmed.
New York has often been the biggest payer in the Tax Foundation’s annual comparison of taxes to spending, which inspired Daniel Patrick Moynihan and the Kennedy School of Government to launch their annual reference book comparing state taxes with spending (www.ksg.harvard.edu/fisc99) more than 25 years ago. In recent years, however, other states have eclipsed New York for the “blessing” of being the state that gives far more than it receives.
Combining the third highest tax burden per capita with the ninth lowest federal spending, New Jersey had the lowest federal spending-to-tax ratio (57¢). Other states that had low federal spending-to-tax ratios in FY 2003 are New Hampshire (64¢), Connecticut (65¢), Minnesota (70¢), Nevada (70¢), and Illinois (73¢).
Changing Ranks
The state that raised its ratio the most over the past ten years is Alaska where federal spending rose from $1.30 to $1.89 for each dollar in taxes. This 59-cent increase beats out Alabama, where federal spending increased 35¢ per dollar of tax, West Virginia (33¢ more spending per dollar), and Kentucky (32¢ more spending per dollar).
States where the ratio dropped most are Colorado and Massachusetts. Colorado has seen its federal spending-to-tax ratio fall 20¢ from $1.00 in FY 1994 to 80¢ in FY 2003. Massachusetts’s has dropped 18¢.
What Affects Rankings?
Federal spending on defense and other procurement dollars are often funneled to the states of powerful Members of Congress, and state governments can grab more federal grant money by skillfully manipulating their spending to comply with federal regulations.
However, demography may be more influential than politics. States with more residents on Social Security, Medicare and other large federal entitlements are bound to rank fairly high. Similarly, the high spending levels in Virginia, Maryland and the District of Columbia are explained by the predominance of federal employees.
On the tax side of the equation, states with higher incomes per capita— New Jersey stands out—pay much higher federal taxes per capita because of the income tax’s progressive structure. The citizens in these high-income, high-tax states do not always live better or save more than people in low-income, low-tax states because the cost of living is usually that much higher or more. (See data tables here).
Best known for its annual calculation of Tax Freedom Day®, the Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
Sweetie pie,
Darlin'....
I bet you are one of those culturally inbred, socially isolated, removed from reality folks that thinks chicken comes from the grocery store, bread comes from the bakery and veges come from the freezer.
My advice:
Learn how to container garden and fast.
(as for the meat, I hear there are some mighty big rats up your way ;) )
I have no interest in reading your gasbag comments but this ex-New Yorker, ex-accountant and ex-corporate executive knows stupidity when it jumps off the computer screen.
Your statistics are worthless because of the impact of corporate headquarters location. NY, NJ, CT, CA, PA even DE (think DuPont) are the site of hundreds of large corporation's headquarters. The goods produced in red-state factories of Heinz (for example) are counted as blue state because Heinz is hq'd in PA.
I'll bet your statistics even include the overseas revenues of multinationals like Heinz.
Being a snotty elitist is hard work. You obviously aren't up to the job.
Regarding the figures on income and tax distribution...
I'd like to know where these figures come from. My suspicion is that the figures on productivity and income are generated by corporate centers - I seriously doubt that each individual corporation's income and productivity is broken down by division/plant/state and then re-aggregated by state.
Since taxes are paid from the corporate centers, of course these figures would indicate the everything is "generated" in the blue states and distributed country-wide. At a high level, its only an observation of how the tax system is "designed".
You'd have to look much, much deeper to get a real sense of how productivity, income and taxes are generated and distributed to get a real sense of geographic balance.
On a related note, if government at all levels weren't so involved in meddling with business, just how many corporations would locate their headquarters near city centers? A big reason they do so is to be close to government so they can have some influence on the onslaught of taxes and regulations.
Furthermore, a good question to ask is why did we build interstates, railroads and communications lines networked to the city centers? Is it to move products/services in, in support of the cities, or out, to distribute to the rest of the country? How much physical product is flowing out of the city centers? A lot of money flows there, to be sure, but that isn't the same thing as product or productivity.
News Release
October 14, 2004
Study Finds Some States Have Business-Friendly Tax Climates, Some Don't
In the wake of new government data showing that job relocation to other states is twice as common as "outsourcing" abroad, a new Tax Foundation study examines the role of attractive state business tax climates in the shifting of economic activity.
“States do not enact tax changes in a vacuum,” said Scott Hodge, president of the Tax Foundation and co-author of the study. “Every tax change will affect a state’s competitive position relative to its neighbors, as well as globally.”
The new study, “State Business Tax Climate Index,” ranks the 50 states on how “business friendly” their tax systems are, providing a roadmap for state lawmakers concerned with keeping their states tax-competitive.
The goal of the index is to focus lawmakers on good-tax fundamentals in their states, rather than short-term tax abatements and exemptions designed to temporarily lure high-profile companies, baseball teams, and auto plants from other states.
“The temptation is for state lawmakers to lure high-profile companies with packages of tax bonuses,” said Hodge, “but that strategy can backfire.”
For example, in 2000 officials in Columbus, Ohio, lured a moving company with a 5-year package of tax goodies. In 2004, the company had not only failed to add 100 jobs as promised, but it had actually fired 98 employees, sending lawmakers into a panic to yank the final year of tax breaks.
“Ohio’s experience shows preferential tax bonuses don’t guarantee jobs will stay permanently,” said Hodge. “Often they mask deeper flaws in state taxes. The Tax Foundation’s new State Business Tax Climate Index helps draw those to lawmakers’ attention.”
Even states with excellent business tax climates trot out extra tax incentives. In 1996 Florida lawmakers lured a major credit card company to open a call center with a generous $4 million tax refund package. But earlier this year lawmakers were shocked at the announcement that the company was closing the Tampa call center and laying off 1,100 workers.
Best and Worst Tax Climates
Generally the index rewards tax codes that are neutral, have low and flat rates, are simple and transparent, avoid double taxation, and have statutory or constitutional restraints that keep tax burdens low over time. See Tables 1 and 2 here for the overall results.
The ten states that began 2004 with the most business-friendly tax systems are: South Dakota, Florida, Alaska, Texas, New Hampshire, Nevada, Wyoming, Colorado, Washington and Oregon.
“Nearly all of the best states raise sufficient revenue without imposing at least one of the three major state taxes—sales taxes, personal income taxes and corporate income taxes,” said Hodge. Four of the top 10—Alaska, South Dakota, Washington and Wyoming—have only one of the three.
The ten states with the least hospitable business tax climates are: Hawaii, New York, Minnesota, West Virginia, Rhode Island, Vermont, Kentucky, Arkansas, Maine and Wisconsin.
The worst state tax codes tend to have:
• complex, multi-rate corporate and individual income taxes with above-average tax rates;
• above-average sales tax rates that don’t exempt business-to-business purchases;
• complex, high-rate unemployment tax systems; and
• high overall state tax collections with few tax or expenditure controls.
“The ideal tax system, whether at the state, federal, or international level, should be neutral to business activity,” said Hodge. “In such a system, people would base their economic decisions on the merits of the transactions rather than the tax implications.”
How it Works
The methodology of the State Business Tax Climate Index is centered on the idea of economic neutrality. If a state’s tax system maintains a “level playing field” for businesses, the index considers it neutral and ranks it highly. However, each state’s final score depends on a comparison with the other 49 states.
The overall index is composed of five specific indexes devoted to major features of a state’s tax system: the corporate income tax, the individual income tax, the sales or gross receipts tax, the unemployment insurance tax, and the state’s fiscal balance. These five indexes are themselves composed of several sub-indexes. Overall, the index consists of 5 specific indexes, 10 sub-indexes, 33 categories and 109 variables.
Each state’s laws and tax collections were assessed as of January 1, 2004, and therefore reflect the business tax climate for the current year, but without consideration of 2004’s legislative action. While the index is comprehensive, it is not exhaustive. Future research into state taxation will lead to new variables and sub-indexes in future editions of the index.
Best known for its annual calculation of Tax Freedom Day®, the Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.