Wednesday, December 22, 2010

What does the census tell us?

Besides the political changes that avid followers of politics are salivating over, we can learn something else from the Census results announced yesterday. People are voting with their feet and they're voting for low-tax states. As Michael Barone summarizes,
[G]rowth tends to be stronger where taxes are lower. Seven of the nine states that do not levy an income tax grew faster than the national average. The other two, South Dakota and New Hampshire, had the fastest growth in their regions, the Midwest and New England.

Altogether, 35 percent of the nation's total population growth occurred in these nine non-taxing states, which accounted for just 19 percent of total population at the beginning of the decade.
There still are some advantages to having a federal system wherein the states can experiment with different policies and the rest of the population can figure out which policies worked. The fact that California did not get a new seat this time tells us something about how other people regard the desirability of moving to a state headed for the shoals.

Personally, I'm glad that these results came out just ahead of the unit in my Government and Politics class in which we study Congress and talk about reapportionment and redistricting. In fact, my students should be playing the Redistricting Game over the winter break so they'll be right up-to-date on the political impact of these latest results. If you have some free time, you can head on over to the game and see how well you do on gerrymandering a seat for your chosen party.

17 comments:

Ron Snyder said...

Conservative must keep calling/writing their reps and party leaders.

I have been unable to reach the Congressional Switchboard many times in recent months, which I believe is a great sign. Did make me put my Federal Rep's State offices telephone numbers in my phone though.

Pat Patterson said...

Unfortunately it show me that like a plague of locusts who have completely denuded the landscape of one state are now spreading out into states that previously weren't affected. I'd say quarintine but that didn't work in OC as they just outbid the locals.

Tacitus Voltaire said...

[G]rowth tends to be stronger... 35 percent of the nation's total population growth occurred...

barone is squinting his eyes here and defining growth as population growth. if that were the only criterion for economic strength, we would have to define india as having the most successful economic policies

does anybody think we need to be more like india?

whenever there is an economic retreat, such as in 2000-2001, here in silicon valley we note where those who can't make it in the big show give up when things get tough and go back from whence they came

MarkD said...

The subject of Barone's essay was population growth vs state taxes.

If your retort is an economic so what, you can console yourself with the thought that NY did even worse than California. The rust belt (that's us, NY) were in the bottom fifth. California was in the next lowest fifth. Texas was in the middle fifth. The best economic performance was concentrated in the farm belt.

When I retire, I'm gone. I can't afford to live here. I took a pay cut (mandatory furlough), and now I see my town taxes are going up 14 percent. It's no surprise NY lost 2 seats in redistricting.

Locomotive Breath said...

Where Americans are moving. This is an interactive map put together by Forbes using IRS data.

http://www.forbes.com/2010/06/04/migration-moving-wealthy-interactive-counties-map.html

b5blue said...

Clearly, these people have too much economic freedom. The lefties must find a way to regulate the interstate migration of people. *rolls eyes*

Tacitus Voltaire said...

markd - if your only income is social security when you retire, you shouldn't owe any federal taxes. new york and california exclude social security from state income taxes. what onerous new york state taxes would you be avoiding by moving out of the state, and how much less would they be where you plan to move to?

Pat Patterson said...

Since MarkD didn't identify the source of his retirment money why would TV automatically assume it is from SS. Unless of course there is some obscure point he wishes to make. But let's consider California, fuel costs are about 10-16% higher, housing costs are still above the national average as our food prices, insurance and worst of all local and state taxes.

Even by moving to a state that taxes SS as investment not as earnings it is probably cheaper to move and use the money from the house sale to supplement your income.

Tacitus Voltaire said...

Blogger Pat Patterson said...
Since MarkD didn't identify the source of his retirement money why would TV automatically assume it is from SS


um, pat, if you are retired, then generally this means you are not working. if you are not working, you aren't making any money to get taxed on, at least as far as income taxes and payroll taxes are concerned. if you are retired and making money that you could pay, say, capital gains taxes on, you're probably doing pretty well. as for s.s. being taxed as investment, as far as i can make out and until you show otherwise, this is a product of your own imagination.

as far as gasoline price and sales taxes, they are high in california. let's see, as a commuter i spend about $200/mo on gas. if gas prices are $15 percent higher here, i could save a whopping $30/mo by moving to nevada. of course, if i were retired, i probably wouldn't have to commute. and our sales taxes are astronomic at, what is it, %9 now? a more normal sales tax rate would be around %4. if i spend $500/mo on food and other basics, i could save $25/mo on sales taxes by moving out of state

yes, many people when they retire sell their expensive houses with the expensive property taxes in california and buy much cheaper ones elsewhere. probably like yourself, they take advantage of the strong california economy when they are working, but when they retire it makes sense for them to move to places where the economy is not so active and prices are cheaper

retired people do not contribute a fraction as much to the tax base of a state as working people. therefore, if the fiscal health of the state government is the subject, the state is better off if the retired people sell their house to a younger couple and move somewhere else

Pat Patterson said...

Then my did you assume and then make a rather fanciful argument based on SS payments? Plus you might want to check on your own retirement because most states tax retirement as income. So if say you are braggart plutocrat claiming to make $250,000 per year and are planning on retiring on your investments when then whatever arrangement is made they will still be taxed. for them to be paid they are taxed. In California if you use CALPERS it is taxed as income and the same thing applies to DEFAS checks.

Most people retire with either work related pensions or some investments so SS is actually not their main source of income. But with one of the highest personal tax rate and one of the highest sales tax in the nation living on a fixes income is still difficult. So the temptation to leave for a low or no tax state is probably very tempting.

Tacitus Voltaire said...

california and new york, the states under discussion here, don't tax social security

if say you are braggart plutocrat claiming to make $250,000 per year and are planning on retiring on your investments

heh. aren't you amusing

we seem to have narrowed the discussion down to whether retirees in california who make money from investments still have so little left over after taxes on them that they need to leave the state. this would imply an intersection between the set of people well off enough to be making significant money from investments in retirement, and people who couldn't afford the extra taxes levied by california. i'm not sure how that would work out in practice, pat. try supplying some numbers and doing, you know - math

Most people retire with either work related pensions or some investments so SS is actually not their main source of income

i'd be interested to see if you can back that up! you specify "main" source of income

there were mostly doctors and lawyers in my family, and doctors, lawyers, and engineers in private industry like myself don't get pensions. will your teacher's pension be subject to state taxes? will you keep your retirement fund in investments when you retire? you are required to cash out 401ks by age 70. many people live on them or put them into annuities, which are not usually subject to state taxes

you throw out a lot of speculation, pat, but i don't see any documentation or numbers

Tacitus Voltaire said...

let's see, taxes on retirees in california... my biggest worry is property taxes, but i see from this table that california only ranks 33 highest in percentage of house value taken in property taxes

http://www.taxfoundation.org/research/show/1913.html

of course, social security taxes are exempt in california. as we have previously discussed, federal income taxes are not taken on incomes under about $40-45k/yr, altho i don't have the exact amount to hand. however, here is a handy table of CA state income tax rates:

The tax table below will show in detail the California state income tax rates by income tax bracket(s). There are 7 income tax brackets for California.

If your income range is between $0 and $7,168, your tax rate on every dollar of income earned is 1%.
If your income range is between $7,169 and $16,994, your tax rate on every dollar of income earned is 2%.
If your income range is between $16,995 and $26,821, your tax rate on every dollar of income earned is 4%.
If your income range is between $26,822 and $37,233, your tax rate on every dollar of income earned is 6%.
If your income range is between $37,234 and $47,055, your tax rate on every dollar of income earned is 8%.
If your income range is between $47,056 and $1,000,000, your tax rate on every dollar of income earned is 9.3%.
If your income range is $1,000,001 and over, your tax rate on every dollar of income earned is 10.3%.


let's say a teacher's pension is in the $35k/yr range taxed at 6%. (remember, CA exempts ss income, so it is not added to the pension for tax purposes). 6% of $35k comes to $2100/yr

so, so far, pat has us saving $60/mo on gas and sales tax, and $175/mo on state income tax, by moving to some other unidentified state. that's a whopping $2820 per year. whoop-dee-do!!!

Rick Caird said...

What???? TV get dumber and dumber. Now, he is claiming that California is OK because it "ranks 33 highest in percentage of house value taken in property taxes".

That is such an idiotic comparison, it should never have been offered. If the house value and the property tax rate are substantially higher, the % being used to compute the actual tax is meaningless as a comparison.

Besides, how many retirees move into California because of the low taxes and cost of living versus those that move to Nevada and Arizona? I must have missed the chorus of people moving to those high tax states for retirement. Sheesh. does this guy think anything through???

Tacitus Voltaire said...

if you can't follow arithmetic, rick, please don't make it so obvious to the rest of us. it's embarassing

Tacitus Voltaire said...

um, rick, the high price of housing in california is due to the operation of the free market. the prices are not set by the government. housing prices are high in california because people want to live here, not because of taxes

Rick Caird said...

Thomas Sowell has been pointing out for decades that housing prices in California are heavily influenced by the land use policies adopted by the state and local governments. Those policies reduce the available housing supply and, surprise, raise the prices. Like so many other areas, the left misidentifies government manipulation as a "market failure" or the results of government policy being misidentified as a direct result of the free market. Congratulations for doing it again.

Your last phrase "... not because of taxes" makes no sense in the context it is being used.

Pat Patterson said...

Actually one of the great inflationary pressures on housing prices is the government via the FHA, Fannie Mae and Freddie Mac and in California Cal-Vet and the many municipalities that offer tax free loans payable on sale to residents. If you can get a loan to bid on a property that means that the property will generally rise in value as opposed to declining in value with less bidders or none at all.