“The calculation of Cost of Government Day for each state is based on the varying government burdens suffered in each state. Federal tax and spending burdens are also a large contributing factor. These federal burdens vary because relatively higher burdens are borne by states with relatively higher incomes. State and local tax and spending burdens vary as well.”
“In recent years most states increased taxes to continue their spending extravaganzas during the economic downturn.” The Cost of Government reported state tax increases since 2003 based on the National Association of State Budget Officers (NASBO). Ohio earned the honors of the state with the 9th highest tax increases. Since 2003, Ohio taxes increased over $13.2 billion. That means the average tax increase for every Ohio citizen was $1,140.98.
“Unfortunately, state lawmakers’ penchant for tax hikes has shown no sign of abating this year: FY 2010 net tax increases across the U.S. total $23.9 billion. As governors and legislators have learned that tax increases are political losers that lead to a loss of business, jobs, residents, and economic growth, they have started to search for less visible ways to acquire revenues that keep them from being forced to cut spending.” Some examples of less visible means of taxation include increasing fees, increasing sin taxes, etc.
As might be expected, taxpayers have been looking to escape the burden of increasing taxes. Migration to states with lower taxes is reportedly the preferred strategy.
“Several studies, including the American Legislative Exchange Council’s “Rich States, Poor States,” and past reports by the Americans for Tax Reform Foundation have documented the movement of taxpayers from high tax to low tax states in recent years.”
“These studies present compelling evidence that taxes are the single largest factor in interstate migration, compared to factors such as climate, employment, family relocation, etc.”
Using Internal Revenue Service data, the report shows that “the ten states with the highest tax burden lost over 3 million residents from 1998 through 2008. These residents took with them a staggering $92 billion in income”.
“During the same period over 2.3 million migrants moved to the states with the lowest tax burden, bringing more than $97 billion with them.”
“In addition to higher levels of emigration, higher tax states also maintain higher unemployment rates, placing an expanding tax burden on a shrinking tax base. It is unsurprising, then, that the top five highest-tax states consistently have about a 0.5 percent higher unemployment rate than the five states with the lowest tax burden.”
“States that attempt to raise taxes to balance their budgets encourage their most productive citizens to find more welcoming homes. They also discourage productivity, as taxpayers get to keep less of what they earn in high-tax states. Worst of all, increased taxes provide government with the permission it needs to grow by sustaining the bloated spending of irresponsible state governments. Absent significant changes in their tax-and-spend schemes, these high tax states will soon find themselves without a populace to support the extravagant costs of living in those states.”
I still wonder if allowing casinos to operate in Ohio will do much to lessen the tax burden. In the long run, I the negative social impact of related crime and wrecked families will likely prove the cost was greater than the benefit.
A more responsible approach would have been to cut more unnecessary programs instead of threatening those programs most needed for the most vulnerable in order shame those who still possess a moral conscience.
Nevertheless, the report presented one positive development. In 2009, Ohio ranked 31st among the 50 states in terms of number of days worked to pay for national spending. This year, Ohio was ranked 27th. This means citizens worked fewer days to pay for the Empire’s spending spree than they did last year.