The Red State Path to Prosperity | TigerDroppings.com

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I B Freeman
Member since Oct 2009
6207 posts

The Red State Path to Prosperity



LINK

Art Laffer, the "Laffer Curve" economist, writing in the WSJ.

Link may require a subscription so here it is in it's entirety.

quote:

You can tell a lot about prosperity in America by observing the places people are moving to and where they are packing up and moving from. New Census Bureau data on metropolitan areas indicate that the South and the Sunbelt regions continue to grow, while the Northeast and Midwest continue to shrink.

Among the 10 fastest-growing metro areas last year were Raleigh, Austin, Las Vegas, Orlando, Charlotte, Phoenix, Houston, San Antonio and Dallas. All of these are in low-tax, business-friendly red states. Blue-state areas such as Cleveland, Detroit, Buffalo, Providence and Rochester were among the biggest population losers.

This migration isn't accidental. Workers and business owners are responding to clear economic incentives. Red states in the Southeast and Sunbelt are following the Reagan model by reducing tax rates and easing regulations. They also offer right-to-work laws as an enticement for businesses to come and set up shop. Meanwhile, the blue states of the Northeast, joined by California, Minnesota and Illinois, are implementing the Obama model of raising taxes on businesses and the wealthy to fund government "investments" and union power.

The contrast sets up a wonderful natural laboratory to test rival economic ideas.

Consider the South. We predict that within a decade five or six states in Dixie could entirely eliminate their income taxes. This would mean that the region stretching from Florida through Texas and Louisiana could become a vast state income-tax free zone.

Three of these states—Florida, Texas and Tennessee—already impose no income tax. Louisiana and North Carolina, both with bold Republican governors and legislatures, are moving quickly ahead with plans to eliminate theirs. Just to the west, Kansas and Oklahoma are also devising plans to replace their income taxes with more growth-friendly expanded sales taxes and energy extraction taxes. Utah, while not a Southern state, leads the tax-cutting pack under Republican Gov. Gary Herbert.

Much of this is the result of GOP victories in the 2010 and 2012 elections. Today 10 of the 12 governors in the Southern states are Republican, and in nine of those states the Republicans control both chambers of the legislature.

Meanwhile, the Northeast is bluer than ever. Consider Massachusetts, where only four of the 40 state senators and just 29 of the 160 House members are Republicans. In the past two elections, the GOP was crushed in Connecticut, New York, Rhode Island and Illinois. And in 2012, Democrats gained a supermajority in both houses of the California legislature for the first time since 1883. Not surprisingly, California, Illinois, New York, Oregon, Minnesota, Hawaii, Connecticut, Maryland and Massachusetts have all raised income taxes in recent years.

But it isn't just higher taxes that make these so-called progressive states less attractive to business. Red states Texas, Oklahoma, Wyoming, West Virginia, Montana and North Dakota (and a few blue states like Ohio and Pennsylvania) are getting rich from oil and gas drilling. Meanwhile, bluer-than-blue New York has extended its moratorium on the technological advance behind the boom, hydraulic fracturing, citing overblown environmental hazards, and Vermont has outlawed it altogether. California's regulations prohibit nearly all new drilling of any kind.

Moreover, the entire Northeast and West Coast is anti-right-to-work, meaning that workers employed in unionized workplaces may be required to join the union and pay dues that might go toward political causes they disagree with. Most of these blue states also have super-minimum wage laws that price low-income workers out of the job market.

All the empirical evidence shows that raising a state's tax burden weakens its tax base. Still, too many blue-state lawmakers believe that a primary purpose of government is to redistribute income from rich to poor, even if those policies make everyone, including the poor, less well off. The obsession with "fairness" puts growth secondary.

Meanwhile, in the South, watch for a zero-income-tax domino effect. Georgia can hardly sustain a 6% income tax if businesses can skip across the border into neighboring states like Florida, Tennessee or South Carolina. Oklahoma Gov. Mary Fallin has told her legislature that the Sooner State will face high economic hurdles in the future if it is an income-tax sandwich between Texas and Kansas. Last year, Tennessee Gov. Bill Haslam signed into law legislation repealing the state gift tax and phasing out the state estate tax. Next on the docket? Repealing the state's tax on "unearned income"—income from sources other than wages such as rent and investments.

Increasingly, under Republican leadership, the pro-growth movement is spreading north. Over the past two years, Michigan and Indiana passed right-to-work legislation, and the latter phased out its estate tax. Ohio Gov. John Kasich turned a $6 billion deficit into a budget surplus with no tax increases. Wisconsin Gov. Scott Walker made a number of positive budget and collective-bargaining reforms and wants tax cuts this year. Kansas Gov. Sam Brownback signed into law legislation slashing the state's highest personal income-tax rate to 4.9% from 6.45%, and says his ultimate goal is to eliminate the income tax.

In short, red states of the South and other areas of the country are moving forward with pro-growth tax reform, while California and the blue states of the Northeast are doubling down on Obamanomics and European progressivism. Who will come out on top? Our money is on the red states and those wisely following their lead.

Mr. Laffer is chairman of Laffer Associates. Mr. Moore is a member of the Journal's editorial board.



This post was edited on 3/28 at 8:18 am



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wickowick
LSU Fan
Head of Island
Member since Dec 2006
24834 posts

re: The Red State Path to Prosperity


quote:

All the empirical evidence shows that raising a state's tax burden weakens its tax base. Still, too many blue-state lawmakers believe that a primary purpose of government is to redistribute income from rich to poor, even if those policies make everyone, including the poor, less well off. The obsession with "fairness" puts growth secondary.






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I B Freeman
Member since Oct 2009
6207 posts

re: The Red State Path to Prosperity


We should pass the Jindal tax swap if for no other reason than to get our share of the businesses leaving the high tax states. As Laffer points out the socialist states are taxing the heck out of their people and the out migration is really pretty large.

I know LABI and the preachers are against it but I am for it. Let's not forget the preachers are outspoken on the issue after being organized by the leftist organization Pico. LINK Well LABI has a lot of members getting special treatment under the current tax code that are no doubt influencing their decision to oppose it.

I know there will be controversy but we should support Jindal on this tax swap.



This post was edited on 3/28 at 9:10 am


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Zephyrius
LSU Fan
Covington, La.
Member since Dec 2004
3123 posts

re: The Red State Path to Prosperity


quote:

Oklahoma Gov. Mary Fallin has told her legislature that the Sooner State will face high economic hurdles in the future if it is an income-tax sandwich between Texas and Kansas.

Good article... and this is why Jindal is proposing eliminating state income tax. He has been very active bringing in new business but sees it as a major obstacle with Texas next door.

I'm sure income tax was one reason why many oil companies set up headquarters in Texas rather than New Orleans when the oil bust hit in the early 80's(plus the tit sucking politicians also).



This post was edited on 3/28 at 8:45 am


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Taxing Authority
LSU Fan
Houston
Member since Feb 2010
23356 posts

re: The Red State Path to Prosperity


quote:

You can tell a lot about prosperity in America by observing the places people are moving to and where they are packing up and moving from
The problem is those bastards are taking their politics with them.



This post was edited on 3/28 at 9:08 am


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WildTchoupitoulas
Member since Jan 2010
16531 posts

re: The Red State Path to Prosperity


Is this what he means by "red states"...?







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EZE Tiger Fan
Member since Jul 2004
24127 posts

re: The Red State Path to Prosperity


quote:

The problem is those bastards are taking their politics with them.


This. Within two decades, they will destroy these areas as well.

See Birgmingham, Atlanta, Memphis...






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BaylorTiger
LSU Fan
Probably Work
Member since Nov 2006
1522 posts

re: The Red State Path to Prosperity


quote:

WildTchoupitoulas


If I need to explain why a graph containing years 1990 - 2007, arguably the most profitable years in recent American history, is not applicable to what's happening today then there's no hope for you.

Your graph, combined with the article above, is depicting what politicians do best. Kicking the can down the road until it can't be kicked any longer and the bottom falls out.

But hey whatever helps you sleep at night.








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DeltaDoc
LSU Fan
The Delta
Member since Jan 2008
9307 posts

re: The Red State Path to Prosperity


quote:

See Birgmingham, Atlanta, Memphis...


Those are home grown leftist. You are talking demographics more than transplants. However, with the actual transplants, you will see less social conservatism, but you will see a positive recognition of fiscal conservatism to a degree.






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EZE Tiger Fan
Member since Jul 2004
24127 posts

re: The Red State Path to Prosperity


quote:

If I need to explain why a graph containing years 1990 - 2007, arguably the most profitable years in recent American history, is not applicable to what's happening today then there's no hope for you.


He's just doing what an Obamabot does.

He and VOR would be highly respected Journalists if they chose that field today.

It's all about selling the leftist dream, facts be damned.






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WildTchoupitoulas
Member since Jan 2010
16531 posts

re: The Red State Path to Prosperity


There are states that take more from the feds than they give, and there are states the give more to the feds than they take.

The states that take more are generally found in the sunbelt while the states that generally give more are in the North.

I'm sorry you don't like that situation, but I beieve it has some influence on where people are moving to.

Let's see the southern states get off the dole and then see what effects that has on the internal movement of people.
quote:

there's no hope for you.

That goes without saying, you must be new here.
quote:

But hey whatever helps you sleep at night.

Meh, usually just a good automanuipulation session and a glass of brandy.






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Turkey_Creek_Tiger
Louisiana Tech Fan
Turkey Crick, LA to Ruston, LA
Member since Dec 2012
12246 posts

re: The Red State Path to Prosperity


Finally, some good news.





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crawdaddy52
Vanderbilt Fan
Member since Dec 2010
898 posts

re: The Red State Path to Prosperity


People have been writing about this great migration for decades. We have managed to get car manufacturing by giving these corps. everything but the kitchen sink. It's like moving your operation to a banana republic. It's not like something has been achieved like great strides in education or superior infrastructure. We're just willing to do it on the cheap.





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I B Freeman
Member since Oct 2009
6207 posts

re: The Red State Path to Prosperity


Of course the population of Texas is greater than the states La, MS, AL and GA combined and is growing. It is not a red state on Wild's map.

I agree with wild we should be more like Texas.

I would rather we quit taking so much welfare from the fed.

OT--the map makes the case that Texas could easily secede from the Union.






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udtiger
LSU Fan
Louisiana
Member since Nov 2006
26789 posts

re: The Red State Path to Prosperity


If Texas bolts the US and LA does not follow, I will be moving.





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I B Freeman
Member since Oct 2009
6207 posts

re: The Red State Path to Prosperity


quote:

People have been writing about this great migration for decades. We have managed to get car manufacturing by giving these corps. everything but the kitchen sink. It's like moving your operation to a banana republic. It's not like something has been achieved like great strides in education or superior infrastructure. We're just willing to do it on the cheap.


One thing the end of corporate tax does is eliminate the things to "give away" to these companies. Texas gives very little to attract business. I would much rather give away sales taxes new businesses pay on plants they build if necessary than to give away the taxes we pay in subsidies. At least with a sales tax credit if that has to happen the business is generating the money we are giving them.

End the film tax credits and other corporate give aways today is my position. By changing the tax structure it would seem to me such give aways would not be necessary.

Texas gets a lot of businesses because of no income tax.



This post was edited on 3/28 at 9:42 am


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EZE Tiger Fan
Member since Jul 2004
24127 posts

re: The Red State Path to Prosperity


quote:

The states that take more are generally found in the sunbelt while the states that generally give more are in the North.


Hmmm.

Wonder why?






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WildTchoupitoulas
Member since Jan 2010
16531 posts

re: The Red State Path to Prosperity


quote:

Texas gets a lot of businesses because of no income tax.

Yet, curiously, LABI has come out against Jindal's tax proposal.

LABI, Democrats criticize Jindal tax plan






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Taxing Authority
LSU Fan
Houston
Member since Feb 2010
23356 posts

re: The Red State Path to Prosperity


quote:

Yet, curiously, LABI has come out against Jindal's tax proposal.
Hell yah! If you own a successful business, do you want a bunch of new competition moving in? Nope.






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udtiger
LSU Fan
Louisiana
Member since Nov 2006
26789 posts

re: The Red State Path to Prosperity


TA pegged it.





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