Anybody wonder, why the "blue" states

[GG]

So you are saying high income tax rates generate higher revenues. So if you cut income tax rates that will generate lower revenues?

 

I think that a first year economics student can see that's not what I said.

 

 

To add to the story, the (blue) states with higher income tax rates also tend to have higher income per capita, so ASSUMING states are hit equally by the downturn, blue states experience greater falls in revenues at all income levels (of course, those with higher incomes will pay more). I believe the wealthier states also tend to have higher sales taxes, which adds a triple whammy.

 

The double hammy comes from taxing the higher earners at a higher rate, not because they make more per capita. If the tax was flat, the reduced personal income would be evenly spread across all reduced income tax receipts. Not so for you great progressives who need to milk the rich during good times and then stand wide eyed when the rich don't make any more money.

 

What's that story about the golden goose?

[GG]

Well you also have to factor in like health programs to the equation states like NJ and NY spend huge amounts of money on health care for its residents. Your point about the tax codes furthers my original argument the simple fact that in a state like North Dakota you don't really need a progressive tax code because 80-90 percent of your residents fall into the same one or two tax brackets. In a state like NJ you have a middle class, a lower middle class, a lower class, a upper middle class that spread across 90% of the tax code.

 

Basically when you have a most homogeneous smaller population its easier to account for the needs and budget of your state which leads to much simpler politics and less deficit spending. While states like NJ and NY have to account for the needs of all of its residents which results in things like big gap progressive tax codes and high spending on social welfare and health programs yet not taxing enough to fund them or having the balls to cut them because they don't want to loose votes.

 

If my link was outdated or wrong I am sorry it looked good. But yeah my point about smaller less diverse populations is still pretty valid.

 

That's fine & dandy except that the health of each states' residents shouldn't be that different across the country and if you apply your theory to a per capita example, it falls apart. Blue states have more people, but the health, education and other services that need to be provided per head shouldn't be different if you're in NJ vs ND. You attribute the higher spending at the blues to more welfare and I attribute it to waste and corruption that naturally attracts people who feed on that system.

 

It all goes to the downside of the progressive tax code, which kills revenues during a downturn as the rich aren't so rich anymore and you still have 50% of your population that doesn't pay any income tax.

 

But that's ok, it makes you feel good because you thought you made a point.

[Adam]

Alabama and Mississippi... nough said. P.S. an exception is Iowa where Senator Hark there is a federal dollar and so called "Conservative" hypocrite Senator Grass Head bring in more federal largess per population that any two congresscritters out there. Eliminating Iowa as a state would constitute a major budget cut and probably balance the budget. Throw in NYC and you could do it.

I have been in NYS and Mississippi- and it wasn't Mississippi schools that taught that Richard Nixon was impeached and rolled out the ball in phys/ed class......

[TPS]

I think that a first year economics student can see that's not what I said.

Dude, simple joke about our long-standing disagreement over supply-side.

 

 

The double hammy comes from taxing the higher earners at a higher rate, not because they make more per capita. If the tax was flat, the reduced personal income would be evenly spread across all reduced income tax receipts. Not so for you great progressives who need to milk the rich during good times and then stand wide eyed when the rich don't make any more money.

 

What's that story about the golden goose?

Not disagreeing with your point--of course it's a truism that as incomes rise in a progressive system, so do revenues; and the reverse is also true. However, my point was that higher average income will also add to the greater swing in revenues--there are more wealthy people in California than Alabama.

 

Btw, the egg was golden, not the goose.

[ExiledInIllinois]

Anybody wonder, why the "blue" states, are the ones falling into the financial toilet?

 

Let me guess... Because all those years past in industrial America, the blue states were helping the red states get a leg up with infrastructure. Now it is their time to pay up with population density moving south and west, industry shifting elsewhere... And these areas don't want to pay for a round.

 

Seems pretty clear to me. The red states are bar room stiffs.

[GG]

Dude, simple joke about our long-standing disagreement over supply-side.

 

... and you took the retort seriously.

 

Are first year econ students really that bad?

 

 

Not disagreeing with your point--of course it's a truism that as incomes rise in a progressive system, so do revenues; and the reverse is also true. However, my point was that higher average income will also add to the greater swing in revenues--there are more wealthy people in California than Alabama.

 

This is where I disagree. Higher average income wouldn't matter in a flat tax environment, as the swing in revenues would be the same between the two states (assuming swing is defined as a percentage of revenues). But in a progressively taxed state a recession makes a huge difference, because you're losing revenue from your higher income tax base and many fall into a lower tax bracket, while the other half never paid taxes in the first place so you're not losing that revenue.

[Delete This Account]

How about we take all the blue states and most all the great cities in the country and Wall Street and DC and the film and music capitals of the world and a significant portion of the great universities and all of you red states just secede and form your own country. That would be swell.

there's room up in Canada, and I might have a connection or two ...

 

jw

[finknottle]

Honestly its because Blue States have larger populations which require more spending in terms of education and social programs. Think about it how much money do the Dakotas have to spend on education and social welfare? Not much really which leads them to have surpluses having low and not dense populations leads to less need for government spending simply put running Idaho isn't as complicated as running New Jersey.

 

In Idaho you have a homogeneous population they all have similar professions and similar needs (Not all people in Idaho are the same but my point is they a lot of the population have similar needs and political outlook). While In a State like New Jersey you have all walks of life and a huge population to support. A state like NJ needs to fund an educational system that alone would bankrupt Idaho (And as a proud graduate of the NJ public school system I can say that while my high school was filled with cool teachers the facilities sucked I mean we were still getting rid of asbestos as recently as 2005 when my bro graduated).

 

Like I said it really has nothing to do with political out look but rather population. In fact Texas a red state with a big population has often struggled with deficits (Recently they operate without one but in 2002 they had a 10 Billion dollar debt).

 

In fact Georgia a "red state" has a 2.5 Billion dollar deficit while New York has a 1.7 Billion dollar deficit. The fact is if you look at percentage of the deficit in terms of percentage of budget New York and New Jersey rank at the bottom third of the pack with 3% and 3.7% differences in percentage of spending (Simply put those states are 3 percent and 3.7 percent over budget while a state like Arizona with a 1.2 billion dollar deficit is 11.9 percent over budget)

 

Like I said it has more to do with things like population and population density rather than those dirty liberals can't stop writing checks they can't cash. here is a link of state debt.

 

http://www.mybudget360.com/fiscal-situatio...-2010-and-2011/

 

I propose that we divide the nation into 300 states of a million people each. Each will require less spending on education and social programs. The state deficit problems will be solved!