State Income Tax - Will Florida benefit?

[spuwho]

Economist Arthur Laffer writes an op-ed for the WSJ which shows that progressive income taxes (at the state level) eventually kills economic growth. He calls this kind of taxation the "Bill Gates Income Tax" due to the Gates family penchant for promoting it.

http://online.wsj.com/article_email/SB10001424052748703882404575520241519315372-lMyQjAxMTAwMDAwNTEwNDUyWj.html

Will Florida recover faster in the economy due to it not having an income tax?

[Lunican]

The 11 states where income taxes were adopted over the past 50 years are: Connecticut (1991), New Jersey (1976), Ohio (1971), Rhode Island (1971), Pennsylvania (1971), Maine (1969), Illinois (1969), Nebraska (1967), Michigan (1967), Indiana (1963) and West Virginia (1961).

The "Prior to income tax" column represents state GDP and personal income for a mystery year sometime over the past 50 years? I guess he assumes that nothing else could have impacted these numbers over that time period?

[ChriswUfGator]

Should be "Laughter Associates" instead

[Lunican]

For example, in order for this to have any kind of meaning, we would have to believe that nothing else has changed in Michigan that would impact their GDP and personal income from 1967 to 2009.

[spuwho]

The 11 states where income taxes were adopted over the past 50 years are: Connecticut (1991), New Jersey (1976), Ohio (1971), Rhode Island (1971), Pennsylvania (1971), Maine (1969), Illinois (1969), Nebraska (1967), Michigan (1967), Indiana (1963) and West Virginia (1961).

The "Prior to income tax" column represents state GDP and personal income for a mystery year sometime over the past 50 years? I guess he assumes that nothing else could have impacted these numbers over that time period?

The "prior year" refers to the year just before they passed an income tax. So for Michigan, that SDP would be in the year 1966, for Illinois, 1968.

It isn't known if Mr Laffer took other economic conditions in consideration. For example, was it income taxes that caused the Rust Belt flight (most of the states listed are in the Rust Belt) or was it the flight that caused the taxes to go up due to lost industry.

I think he wanted to emphasize that the use of state income taxes (as pushed by the Gates) is counter productive to long term economic growth. As ones disposable income increases, the government would take more and more, leaving less for discretionary spending, investment or other uses outside of government redistribution.

[urbanlibertarian]

IMO consumption taxes are better than income, capital gains and inheritance taxes.  When a tax is levied on a particular activity it deters the taxpayer from engaging in that activity.  To me, it seems better to deter consumption than deter earning and investment.

[ChriswUfGator]

The 11 states where income taxes were adopted over the past 50 years are: Connecticut (1991), New Jersey (1976), Ohio (1971), Rhode Island (1971), Pennsylvania (1971), Maine (1969), Illinois (1969), Nebraska (1967), Michigan (1967), Indiana (1963) and West Virginia (1961).

The "Prior to income tax" column represents state GDP and personal income for a mystery year sometime over the past 50 years? I guess he assumes that nothing else could have impacted these numbers over that time period?

The "prior year" refers to the year just before they passed an income tax. So for Michigan, that SDP would be in the year 1966, for Illinois, 1968.

It isn't known if Mr Laffer took other economic conditions in consideration. For example, was it income taxes that caused the Rust Belt flight (most of the states listed are in the Rust Belt) or was it the flight that caused the taxes to go up due to lost industry.

I think he wanted to emphasize that the use of state income taxes (as pushed by the Gates) is counter productive to long term economic growth. As ones disposable income increases, the government would take more and more, leaving less for discretionary spending, investment or other uses outside of government redistribution.

This represents nothing more than the macro decline of heavy industry and farming as the primary engines of the US economy, and the results of Laffer's study reflect only that this activity was predominately concentrated in the states he reviewed, and then got farmed out overseas during the latter half of the 20th century.

The fact that these states did or didn't have income taxes has nothing to do with it. May as well analyze the migratory patterns of Canadian Geese on the economic performance of state economies. Results would be just as meaningful.

Note: I do not favor state income taxes, or really any income tax. I favor use taxes and sales taxes. But let's at least be dealing with a full deck if we're going to analyze the issue, not stats that overlook obvious 800lb gorillas that are not only in the room, they're mauling your wife and munching on your foot while Laffer pretends not to notice.

[hillary supporter]

As current residents of both Florida and New Jersey, Last years experience of filing our income taxes in Florida , and establishing our residency here made us hard core Jacquar fans. Hard core!