Posted on 12/21/2008 4:44:27 AM PST by reaganaut1
In the United States, workers in cities offering above-average nominal wages pay 30 percent more in federal taxes than otherwise identical workers in cities offering below-average wages. In The Unequal Geographic Burden of Federal Taxation (NBER Working Paper No. 13995), author David Albouy estimates that federal taxes lower long-run employment levels in high-wage areas by 15 percent, depress land prices there by 25 percent, and reduce housing prices in the area by 4 percent. Economists term these negative outcomes "locational inefficiencies", and Albouy estimates that they cost taxpayers $34 billion in 2005.
In the United States, highly taxed areas tend to be in large cities inside of populous states. Albouy conjectures that their higher tax burdens may be a reflection of their relatively low Senate representation and later Presidential primaries. The taxpayers in these highly taxed states often claim larger deductions than their counterparts in states with lower federal taxes. While these deductions may help workers to locate more efficiently, their effect is not strong enough to offset the consumption inefficiencies that are caused by higher nominal incomes and correspondingly higher taxes. Locational efficiency is easier to achieve by indexing taxes than by providing deductions.
(Excerpt) Read more at nber.org ...
Source is not the New York Times, sorry for the error.
Got that right.
The Obama hyperinflation will fix this. Everyone will be in the top tax bracket.
His economic team is busy oiling and preparing the printing presses at the mint.
A loaf of bread will cost $1000.00 when he’s done.
That's a relief. I thought higher taxes were due to the abundance of demonrats in those governments followed by excessive spending on all of their accompanying social and give away programs, extraordinarily expensive school systems and all the pork they spread around. Sadly, these days republicans aren't much better than the demonrats.
At one time when Florida was relativity cheap to live in, he made about 30% more in income than I did. When we compared cost of living, housing, all taxes. I actually was a little better off.
The Democrats would prefer to turn the US into a model of socialized Europe. Their plan was to force gasoline to punishing high prices which over time would incent the people to move back into the cities, use public transportation, give up the automobile, etc. The drastic drop in oil prices has thrown them off track, for a while.
Simple solution to the perceived inequity problem - a flat tax, and the requirement that domestic spending be apportioned to the neighborhood from which the taxes were collected.
Whatever.
Conservative inactivists don’t protest. Don’t riot. Don’t even call their congressmen.
They just stay home and the politicians know that they should focus on the active voters...liberals.
the easy solution is to drop all federal income taxes for equality.
also, if a state wishes to tax its people greatly, why should other, more tax-friendly states have to subsidize the heavily-taxes one?
a person should always be free to choose where he wishes to live without this market distortion of the feds.
You wrote:
“... why should other, more-tax friendly states have to subsidize the heavily-taxed one?...”
You’ve hit the nail right on the head.
I happen to live in TN, a pretty low cost-of-living state. I often have to listen to my peers back at ‘corporate headquarters’ in Delaware complain bitterly about their high local taxes (property and state). Note: our salaries are paid on a ‘national’ scale so the pay for a given level are the same, regardless of where one lives.
I just smile and happily report the size of my house and what little property taxes I have to pay, including our 18 acre lot. Plus the fact that TN has NO state income tax.
OTOH, ‘they’ get to deduct their state, local, and property taxes off their federal tax return. That doesn’t fully even things out... but it does mean that we low-taxed regions are subsidizing the high-taxed regions of the country.
Even so, it’s these high-taxed states whom are in the most trouble. Something’s going to give and I sure hope it’s not a federal bailout of the states/cities. That will mean even more money being taken from the Red areas to subsidize the Blue areas...
this is the problem...
http://www.taxfoundation.org/news/show/22652.html
We have an OLIGARCHY that runs this country...because 10% of the country pays 70% of the taxes. They own it.
It is not POSSIBLE for the same minds that created this mess to get us out of it. The only way to get new minds involved-peacably and orderly-is for Americans to buy back their government. The FairTax is the only vehicle that does that job without high velocity lead involved...IMHO.
benefits and drawbacks to wherever you live; you make the choice. I’m paying 6 bucks a gal for fuel and rediculous prices for food but no moving for me. It seems somewhat ironic that those who have reaped the wonders of urban life now complain of the costs?
Good question.
Depending on the county/city, sales tax can run up to 9.75% in TN. I doubt you’ll find sales taxes much higher that that anywhere - it’s probably at the limit of what the market-will-bear.
Because it’s regressive (actually, let’s call it: ‘fair’), a higher sales tax but no sales tax greatly helps a higher wage earner.
For TN then, we have high sales tax, generally low property taxes, and no sales tax. That puts us on the lower end of ‘local taxes’ owed.
There are always pluses and minues to consider. Perhaps the lesser ‘services’ we get from the government are the punishment we get for low taxes? Perhaps. For instance, we have less ‘arts’ available, we have very few, if any, ‘light rail’ projects in TN, and no locally sponsored ‘global warming’ projects.
Hummm, come to think of it - lower taxes seem to be a good thing.
Your mileage may vary...
The potential subsidizing of high cost blue states by the red states is in effect the exact type of policy practiced by the liberals.
libs have no interest in raising up people to become more successful but prefer to drag the successful ones down to mediocrity. You can see this in the federal tax code.
Rather than let the blue states fail due to the tax burdens they subject their citizens to, they wish to “balance out” the equation by making the thriving red states pay for the excesses practiced by the blue states in the name of “fairness”.
Just take a look at the growth states in this country and it will be quickly apparent that the leaders are the ones with lower costs and low taxes.
http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm
Why would any sane person penalize these states? Could this ever be beneficial for the country?
It would be interesting to watch, as for example when the interstate highway system went away in rural areas.
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