Things We Read Today (56)

Where’s Sales Tax Revenue Going?

The problem with debates about tax policy is that there are so many variables, as one compares state to state, that clear-cut comparisons to explain results are not possible.  Consequently, anybody who makes statements of that sort with the casual assurance that the answer is not debatable should be considered with some skepticism.

Such a one is Rhode Island Public Radio’s Scott MacKay:

Rhode Island’s sales tax rate is 7 percent, which is higher than our New England neighbors. Yet because our sales tax is riddled with exemptions, Rhode Islanders ranked only 25th among the 50 states in the amount of sales taxes collected per $1,000 in personal income.

Is it the number of exemptions that creates this circumstance?  That might be part of it, but it’s difficult enough to understand what is exempt in Rhode Island, let alone in the 49 other states without trying to compare their results.  If Rhode Island exempts 1,000 low-cost products, like newspapers, while other states exempt 100 products that cost ten times as much, then the exemption count doesn’t matter much.  The same is true if Rhode Island exempts five dozen specialty products that few buy while other states exempt one dozen products of the same price that everybody buys regularly.

I’m plucking numbers from the air, here, because the point is that such a comparison would be a massive undertaking that, to my knowledge, nobody has undertaken.

Pull back the microscope a bit, though:  Are there other factors that might also yield the same result — that might also leave a state that has a high sales tax rate with only modest per-capita (or per-income-unit) revenue?  Well, yes.

Suppose a small state, in which every county is a border county, had a higher sales tax than the states around it, and not only did nobody from other states travel there to shop, but people within the state went elsewhere.  Such a state would have a high rate, but low revenue, as measured against its population.

Multiple studies support that interpretation, including some on the disparate effect of tax differentials on border counties, as well as of states’ differing trends after tax changes.  If I had to place bets on which is the biggest factor in RI’s results , I’d go with that rather than MacKay’s.

The good news is that flipping the differential — giving Rhode Island the better shopping environment — would similarly have a disproportionate benefit for the state’s economy.

What’s the Pope Saying?

My entire life, it has been the case that media coverage of the Pope has been… well… not quite up to basic standards of accuracy.  For their part, headline writers take articles that might charitably be explained on grounds of ignorance and sensationalize them to the point of deception.

What’s fascinating with Pope Francis is that the practice has flipped.  It’s always been that the Pope would say or write something directly in line with Roman Catholic teachings, and the journalist would ignore context that mitigated the statement, and the headline writers would present the statement as some new revolution in bigotry.  “Pope condemns little old ladies to Hell!”

With Francis, the Pope says or writes something directly in line with Roman Catholic teachings, and the journalists ignore that he’s simply articulating the mitigating context that they’ve ignored in the past.  The headline writers proclaim that he’s sweeping the rug out from under believing Catholics the world over: “Pope Francis assures atheists: You don’t have to believe in God to go to heaven.”  “Pope Francis: It’s OK Not to Believe in God if You Have Clean Conscience.”

So what did the Pope actually write?

So I come to the three questions you put to me in the article of August 7. It seems to me that, in the first two, what is in your heart is to understand the attitude of the Church to those who don’t share faith in Jesus. First of all, you ask me if the God of Christians forgives one who doesn’t believe and doesn’t seek the faith. Premise that – and it’s the fundamental thing – the mercy of God has no limits if one turns to him with a sincere and contrite heart; the question for one who doesn’t believe in God lies in obeying one’s conscience. Sin, also for those who don’t have faith, exists when one goes against one’s conscience. To listen to and to obey it means, in fact, to decide in face of what is perceived as good or evil. And on this decision pivots the goodness or malice of our action.

Note the condition: “the mercy of God has no limits if one turns to him with a sincere and contrite heart.”  In other words, a more accurate paraphrase would be that it’s OK not to have believed in God.  In the Catholic context, whether one’s conversion is before or after death is immaterial.

With regard to the importance of one’s conscience, we turn to the Catholic Catechism, which (as far as I know) is not blocked online to non-believing journalists.  In paragraph 1777, the Catechism says that, when a person listens to his conscience, “the prudent man can hear God speaking.”  The prior paragraph calls the conscience a “secret core” and “sanctuary,” where one “is alone with God.”

Subsequent paragraphs go on to note the necessity of honing one’s conscience, which is “a lifelong task.” Developing one’s conscience is, according to the Church, difficult work and will ultimately lead one to the correct understanding of God.  To break this down to the question of Heaven or Hell, what matters is whether, upon coming face-to-face with Jesus, the person says, “It was you,” or, “This must be a trick.”

In handling Popes, as in many other areas of public interest, those who are solely informed by the mainstream news media will find it difficult to explain events in the future.

How Did the 1% Come to This?

Speaking of things that you’ll find difficult to explain if you only follow the mainstream news, take a look at this table of the disparate effect of downturns and recoveries on the One Percent.  According to the chart, under Obama people in the top percentage point of income experienced less than half of the income loss of the recession and have gained almost 100% of the growth in the so-called recovery.

As I’ve been pointing out for quite some time, throughout this recovery, almost all of the new national debt has been going into inflating stocks.  Throw in the effects of quantitative easing as a massive amplifier.

For more than half a century economic growth has been underwritten with growth in national debt. That may have been justifiable when the forecast was for continued population growth, but under no circumstances could it have gone on forever.

During the boom years of President Reagan, taxation and regulation policies encouraged people to turn that borrowed money into productive uses in the present.  That still wasn’t a sustainable path, but after the bad old days of the ’70s, it could have been an effective launch if subsequent administrations and Congresses had seen it for what it was and found a way to ease into a more rational, sustainable economy.

Under President Obama, taxes have gone up and regulations have gone off the charts.  Consequently, the economic “priming” of debt and quantitative easing is simply flooding the engine, so to speak, inflating the wealth of rich people back to the point (and beyond) they’d achieved under the false premises of the mortgage-backed boom and thereby socializing the loss from its bust.

People who only know the standard narrative — taught in government schools by unionized teachers and reinforced throughout life by an overwhelmingly liberal Democrat news media — will find this statement incomprehensible, but if you want to give the 99% a chance relative to the 1%, you need a Reagan, not an Obama.

Quod Erat Demonstrandum

Like I said:

John Lott points out the following: “So far this year there have been 848,000 new jobs. Of those, 813,000 are part time jobs…. To put it differently, an incredible 96% of the jobs added this year were part-time jobs.”

Disclaimer: The views and opinions expressed in The Ocean State Current, including text, graphics, images, and information are solely those of the authors. They do not purport to reflect the views and opinions of The Current, the RI Center for Freedom & Prosperity, or its members or staff. The Current cannot be held responsible for information posted or provided by third-party sources. Readers are encouraged to fact check any information on this web site with other sources.

YOUR CART
  • No products in the cart.
0