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Originally Posted by zimmy
There is no validity in the point that red states are better off financially than the blue states without mention of the differences in taxes. It may not be responsible for CT's debt, but it effects budgets at the local and state level. You don't need me to give you data, it is simple arithmetic. Property taxes, state income taxes, business taxes are all lower in those red states than they would be if those federal outlays were different. See what BIll Crist thinks about how the Romney/Ryan plan will affect the states. You argue constantly about how tax policies affect competitiveness, but now say that it is irrelevant in comparing states who gain money from tax policies to those who lose money from the same policies? Really? The lowest debt per gdp is wyoming. From the 2007 numbers, they paid 4.7 billion in fed taxes and received 5.2 billion, positive $0.5 billion. Ct paid $54 billion and got back 37 billion for A LOSS of $17 billion. You really think that gaining 1/2 a billion for state coffers per year versus losing $17 billion from state coffers per year doesn't effect debt, tax rates, etc?
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Zimmy, I never denied that CT operates with a net loss of federal income tax dollars. That needs to be taken into account. But you are concluding that that translates into a dollar-for dollar adjustment to the state debt. That's statistically wrong for at least 3 reasons.
(1) You assume that, if we had those federal tax dollars back, our debt would be lower. Politics doesn't work that way.
Liberal politics especialy doesn't wok that way. I remember when they rammed the state income tax down our throats, they said it would ensure our financial health. Well, with all that additional revenue, we have more debt now than we did then. Why? Because when liberal politicians see revenue, they cannot spend it fast enough. Spend, spend, spend.
(2) You say that CT has an average net loss of $17B. If that's correct, not all of that is money lost to other states, here's why...every state has to contribute something to the activities that take place in Washington DC, as well as what takes place overseas, especially when we are at war. So it's not mathematically possible that the "average" state breaks even with federal tax cash flow.
(3) If CT operates in a net loss of federal income tax dollars, much of that net loss is offset by how much higher state/local taxes are in CT compared to WY.
Tax rates: Where does your state rank? - Apr. 14, 2009
According to this chart, the average CT citizen pays $7,000 in state/local taxes. The average WY resident pays $3700. So the average CT citizen pays $3300 more. There are 3.4 million CT residents. So the state of CT collects $11.2 billion more in state/local tax revenue, than we would collect if we had WY's tax rates. That annual increase of $11.3 billion offsets most of the federal income tax loss.
Yes, our taxes need to be a bit higher because we send money to other states. But that doesn't explain much of the discrepancy in financial health between red states and blue states. Not even liberal politicians are blaming the problem on the federal tax shift. I have never heard a single CT politician claim that our debt is largely driven by a shift in federal income tax dollars out of state. It's certainly not something that is commonly accepted, even in liberal circles.
It's policies Zimmy, not federal tax dollars. In WY, I can guarantee you that public servents don't get the insane compensation that they get here in CT. WY doesn't attract those who won't work, WY doesn't drive away those who want to work.