Wednesday, December 22, 2010

Imagine That

People really do some strange things. It's awfully difficult to predict human behavior, especially when things are so counterintuitive. Consider this surprising result from Oregon:

Oregon raised its income tax on the richest 2% of its residents last year to fix its budget hole, but now the state treasury admits it collected nearly one-third less revenue than the bean counters projected. ...

In 2009 the state legislature raised the tax rate to 10.8% on joint-filer income of between $250,000 and $500,000, and to 11% on income above $500,000. Only New York City's rate is higher. Oregon's liberal voters ratified the tax increase on individuals and another on businesses in January of this year, no doubt feeling good about their "shared sacrifice."

Congratulations. Instead of $180 million collected last year from the new tax, the state received $130 million. ...

Hard to imagine why that would happen. Equally puzzling is this report on the latest census numbers, from Michael Barone:

First, the great engine of growth in America is not the Northeast Megalopolis, which was growing faster than average in the mid-20th century, or California, which grew lustily in the succeeding half-century. It is Texas.

Its population grew 21 percent in the past decade, from nearly 21 million to more than 25 million. That was more rapid growth than in any states except for four much smaller ones (Nevada, Arizona, Utah and Idaho).

Texas' diversified economy, business-friendly regulations and low taxes have attracted not only immigrants but substantial inflow from the other 49 states. As a result, the 2010 reapportionment gives Texas four additional House seats. In contrast, California gets no new House seats, for the first time since it was admitted to the Union in 1850.

But that's not all. Barone:

There's a similar lesson in the fact that Florida gains two seats in the reapportionment and New York loses two.

This leads to a second point, which is that growth 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.

South Dakota? Dan Hindbjorgen could have told you that. In fact, he tells us that quite regularly on radio ads.

We're getting Mark Dayton as our governor in 2011. Dayton doesn't buy these trends and will attempt to govern the state in a different manner. Minnesota barely held on to its 8 congressional seats in this census. It will be interesting to see if under Dayton's stewardship we are able to maintain that 8th seat. It will also be interesting to see if California, under the stewardship of Jerry Brown and a cavalcade of other Democrats who are in full Alfred E. Neuman mode, will maintain their status in this decade. Perhaps California and Minnesota, along with the other large industrial states that have chosen to stick with the Democrats, will lead the way in the coming years. Guess we're going to find out.


Gino said...

CA has experienced rapid growth from the south, while those already in the state were fleeing east to TX.

i could fill a blog page with the names of people i know, personally, who moved from here to TX. most to around the austin area.

and this depression hasnt hit that hard in TX,either.

W.B. Picklesworth said...

I had a customer come in the other day and declare that she was happy to pay her taxes now that there was a new governor.

I refrained from saying, "Then go over to his office and bend over."

Luckily, Dayton will not have to power to do all the damage he wishes.

Gino said...

i hope WB isnt working in a church...

Night Writer said...

With results like these the next thing you know the Left is going to get serious about building a wall. Not to keep illegal immigrants out but to keep people in all of these high-tax areas so they can pay their fair share. Of course, folks aren't going to like that, so the government is going to need armed guards, minefields and barbed wire checkpoints -- all for our own good, of course.