Texas has taken the Paul Ryan/Republican path in full force. A very low tax rate combined with an aversion to assuming debt and/or raising taxes has led the Texas government to slash services. The question is whether this promotes private-enterprise growth and responsibility the way that Texans envision, or if it leads third-world type issues of uneducated workers, low wages, and high social costs. Worth watching as an indication of how this might play out nationally. I'm happy to give the Republican prescription full credit if it works. (Of course I am under no illusions that Republicans would do the same in the reverse case.) Only thing is -- no transfer payments. If Texas ends up doing well due to large transfer payments from the rest of the country, no fellas that doesn't count.
Not entirely. Texas also is the only state that makes interior designers register for professional licenses. Not for any public good reasons like health or safety but only to fix the market for ID's. Even liberal paradises like NY and CA haven't gone so far.
Voting 4 Texas with their feet Historically there has been a revenue flow out of Texas and into federal coffers. Meanwhile, according to the latest census people and corporations are flocking to the Lone Star State.
One of the reasons that Texas is doing relatively well economically right now is that it was the heart and soul of the savings and loan scandal a couple of decades ago. As a result, they put rules in place that prevented a lot of the worst shenanigans that crippled the housing market in so many states. So props for that.
Does look like Texas had net outflows in transfer payments recently, although it was close -- not the big margins of California, New Jersey, New York etc. On the other hand, Texas was bailed out by the Feds in the 1980s. We'll see going forward. Austerity plans have far from an unblemished record for stimulating economies, to put the matter mildly.
Texas isn't actually doing particularly well now, unemployment is near the national average at 8.2% and the state finances are poor. But you are right, ironically Texas was protected by better regulations and thus the housing market did alright.
For anybody that is not restricted by a paywall here's a New York Times article investigating the efforts to reduce the huge Texas budget deficit. http://www.nytimes.com/2011/04/09/us/09texas.html
I live in Austin rather than Texas but here we have the enviable problem of too much growth than we know how to plan for. The city has done a good job of directing development inward, as best it can, and continuing to draw high-profile employers (Ebay is the latest rumor). It's a phenomenal place to live and work. Not sure how tax policy plays into this - I think it's more cultural than anything. Focusing on voter ID (racist electioneering) and cutting school budgets (racist sociological engineering designed to keep the poor that way) are the items topping the state's Republican agenda, and there's no way to stop them. Just watch. After cutting school budgets across the board, they'll find a way to divert more funds to the suburbs once they feel any pain. My guess is any cuts in urban areas will be much harder to reverse. We'll see if these regressive policies harm the state in the long run.
Good article. I understand the need to cut, but why is our government so allergic to revenue? There are several relatively harmless ways to get it...
They also managed to get the school textbooks edited to deemphasize little things like the Civil Rights Movement, the United Nations and that pesky religious freedom thing. Sadly, the blame for anything bad that happens in that Republican Paradise will be funneled towards liberals and illegal aliens, as usual.
Austin has what, the most brainpower per square mile for 1000 miles? Pretty easy to see what brings the employers.
What do transfer payments have to do with anything? People like to point out that blue states, like CA and NY, fund states that are invariably red as if it's a knock against those red states. Unfortunately, the person making that argument doesn't understand, or acknowledge, that those transfer payments are what keeps food prices down across the rest of the country - NY has how many people per 1 mile of federal highway? How about KS? If you would like to keep transfer payments at a net 0, don't be surprised when food prices skyrocket - any tax increase intended for the producer will be felt by the consumer.
Farm subsidies don't keep food prices down. Besides, Manahattan millionares get more than their fair share of farm subsidies.
Iowans, holier than thou and the salt of the earth, we're all supposed to be like them because they are so virtuous with their heartland values. Yet their existence consists of holding an early caucus so that they can extort promises of welfare farm handouts from the Presidential candidates. Blech.
Government expenditures are not the same thing as transfer payments. Otherwise, WashingtonDC would be the biggest welfare queen of them all.
I am told that when New Zealand was losing a lot of people leaving for Australia, the Prime Minister of New Zealand said that was a good thing because it would raise the IQ of both countries. Apropos of nothing but I like the story.
I find it comical that in Texas one can buy enough arms at any of the multitude of "gun shows" to start a small war in central america yet can't put 25c in a slot machine as the baptist lobby seems to believe you can regulate against stupidity (you can't). Meanwhile 1000's of texans flee to louisiana and oklahoma to gamble legally...taking their taxable dollars with them. Rumor has it that these holy rolling baptists get their anti gambling financing from the casinos in louisiana and oklahoma. Destroy a free market (the right to gamble) and you'll create a black market. Works every time and the self rightous texas bastards are at it again.
Since we are talking about Texas, where I work often, let me relate a tale: I drilled 57 wells in Edwards County. The wells were all basically non-economic but we got a tax credit for drilling them. (basically the only reason Edwards County had an economy). The other income in Rocksprings was mohair goats with a tax credit. The goats were a WWII remnant, when the guv needed mohair for uniforms. The whole place was a welfare state. But the locals thought they were the hardest working cowboys ever. Very Republican. With oil at $110+, Texas may get through the next couple of years (severance tax). But they have no state income tax. The border is a war zone. The cities, suck and blow at the same time. Texas is Kansas with a few miles of coastline.
They make up for the state income tax with an astronomical property tax. Which actually makes some sense, I must admit. It's also less noticeable to voters, who typically put it in escrow with their mortgage and don't have to go through all the forms every year. It's harder to dodge paying as well.
That's the mohair thing! I remember earlier this year Schumer and a Reep doing a bipartisan agreement thing, and eliminating the mohair handout was one of them, it made me laugh. Now I know the genesis of that nonsense.
I don't know how much less noticeable it is to voters, given how ridiculously high it is. When I owned a house in Texas, I was paying almost $5,000 a year to the City of Richardson, Collin County, and Plano ISD on a house that had an appraisal of less than $200,000 (and which sold for $198,000 in 2007). When you're paying more than $400 a month in property tax on house whose mortgage payment was around $900, it's noticeable.
Yep, property tax is probably the most transparent tax of all with payroll taxes being the least transparent. We should do away with payroll withholding and make every American write a quarterly check so they realize how big a bite the government actually takes.