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Rollback: The Tax Revolts in States

Written by Gary North on February 9, 2012

There is good news to share. Across the nation, states are either rolling back their income tax rates or debating this. Oklahoma is one of them. Kansas is considering this. So is Missouri. It’s being debated in Maine, Idaho, Nebraska, Indiana, and Ohio. Even New Jersey!

Lower taxes will not force school closings (sadly) and other state-funded necessities. The following states have no income tax: Alaska, Washington, Nevada, South Dakota, Florida, TexasHampshiremphire, and Tennessee (on wages). The best test case is New Hampshire. It’s just like Vermont geographically and socially. Vermont is a high-tax state. New Hampshire does not have a sales tax, either. The schools are much the same.

They have also recorded faster revenue growth to pay for government services over the past two decades than states with income taxes. That’s because growth in the economy from attracting jobs and capital has meant greater tax collections.

The tax burden isn’t the only factor that determines investment flows and growth. But it is a major signal about how a state treats business, investment and risk-taking. States like New York, California, Illinois and Maryland that have high and rising tax rates also tend to be those that have growing welfare states, heavy regulation, dominant public unions, and budgets that are subject to boom and bust because they rely so heavily on a relatively few rich taxpayers.

We need tax competition. It’s coming.

The politics of plunder is in trouble in the USA. I think this will continue.

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3 thoughts on “Rollback: The Tax Revolts in States

  1. I have an idea! Maybe North Carolina could get rid of it's payroll tax, and lower it's gas tax. Then charge a high rate of tax on it's lottery sales. If the Lottery is so beneficial to our schools, then maybe we could really raise more revenues from it by excising a tax that truly goes to the states coffers. Then one thing would be certain. That either the wealthy or the stupid are the ones actually paying all these taxes.

  2. guest on this planet says:

    THEY RAISED EVERY TAX IN ILLINOIS AND IT STILL ISNT ENOUGH , NOW THEY WANT TO DROP BILLIONS OF UNFUNDED PENSIONS ON THE HOMEOWNERS , NOT THE SECTION 8 DWELLERS OR APARTMENT DWELLERS , TAKEN A CLUE FROM BARRY BY REDISTRIBUTING WEALTH

  3. Vermont and New Hampshire are similary, but not alike socially. People in Vermont, at least the ones that came up the Connecticut and Hudson Rivers tend to be VERY liberal, and they're overtaking the state. True, native Vermonters tend to be more moderate to conservative, despite their screwy tax system.