Total State And Local Tax Systems: Fill & Download for Free

I actually ran some numbers on a Universal Basic Income (UBI).In my plan, adults would get $1,000/month, Children would get $500/month, and seniors would get $1,500/month. So a “family of four” would start off with $32,000/year even before they did any work. This would cost about $4 trillion per year, a little more than the entire current federal budget.But we would also need to do a bunch of other adjustments to make this work. First, we would end nearly all welfare programs not just at the federal level but at the state and municipal levels as well. We also stop paying social security and other government (federal, state, local) pensions up to the level that person is getting in the UBI. So a senior that was getting $1,700 in Social Security is now getting $200 in SS and $1,500 in UBI. Amongst welfare, social security, and pensions we make up about $3 trillion.With a UBI in place we don’t need things like unemployment insurance. We eliminate Social Security going forward. And we implement a flat tax, with the UBI excluded from the tax. This serves to make the tax system progressive but is also easy to implement. For example assume a flat tax of 30%. If a family of four gets a UBI of $32,000 and also earns $32,000 their total tax payment is $9,600. But $9600 on $64,000 is only 15%. If they get $32,000 from the UBI and earn $64,000, their tax payment is $19,200 and their effective tax rate is 20%. If they earn $96,000, their effective tax rate climbs to 22.5%.Now the tax system is extremely simple to implement. If the flat tax rate is 30% and an employee earns $1000 in the pay period, the employer simply sends $300 to the government and $700 to the employee. Employers don’t need people to just administer payroll, and employees don’t even need to file tax returns. This saves about $300 billion dollars in compliance costs.At this point we are down to the program costing about $700 billion a year.Typically places with a low cost of living also have low income potential, and places with a high cost of living also have a high income potential. One of the natural effects is this is that people will find low cost of living areas more attractive with this supplement to their income. So a substantial number of people will move away from the the Bay Area or NYC metro and into places like Ames Iowa. Since the UBI is effectively pumping money into these more rural states, it becomes palatable to redirect the money that goes into farm subsidies and such and instead use it for the UBI.Finally, a UBI largely replaces the need for a minimum wage. $32,000/yr for a family of four is the equivalent of one earner getting $16/hr full time before they do anything else. Without a minimum wage, and with minimal payroll compliance costs, a whole lot of jobs open up that weren’t worthwhile at $11/hr but do make sense at $5/hr. Since welfare is often means tested, these low wage jobs sometimes worked against beneficiaries. But the UBI means that any work, any job, is always a net positive for the worker. So we should see higher employment and higher labor participation rates under this plan. That additional economic activity should be enough to pay for the remainder of the plan.So the numbers work. Or at least close enough that the UBI seems feasible.Of course pragmatically this would be incredibly difficult to implement. The federal government would need to expand its budget by about $2 trillion while the states and municipal governments would need to shrink theirs by a similar amount. And the benefits would only accrue if the states and municipalities cut their programs and adjusted their tax systems in line with the federal changes. If states did not implement a flat tax with the same rules, for example, the compliance cost savings would not be gained. And states would need to cut their own tax rates to reflect the increase in federal taxes.Getting the federal government, 50 states, and thousands of municipal governments on the same page at the same time would be an incredibly difficult task. One would want to make a single law to implement the transition, but the federal government normally does not have that much power. About the only way that it could possibly work is to create a constitutional amendment that would implement the changes in one shot. On January 1st of 2022, perhaps, the various programs of the federal government, the states, and municipal government would all change to align with this plan. The amendment doesn’t need to change the authority of any state or local government in the long run. Their legislative bodies could meet on January 2 and enact a new state or local law. But it would serve to reset everything in one shot.

No need to speculate. We have 50 experiments in democracy in the 50 states of the union. Over the past 10 years these states faced the stress test of the Great Recession and the performance of state governments is measurable. As a nation, we collect an enormous amount of data. If one looks at the data using standard statistical tools, it is clear that liberal states perform better in almost every category of governance. Here are the conclusions that I have reached in examining the period from 2008 to 2016:Fiscal Governance – The crown jewel of conservative governance is the promise of responsible fiscal management, characterized by balanced budgets, low taxes, and low debt. In practice, all states but one are legally bound to balance their budgets. Upon examination, we find that conservative states do, in fact, lower taxes, but end up using other sources of revenue including a larger share from the federal government to make up the difference. There is negligible difference in the total money spent per capita across the political spectrum. Likewise, while conservative states have lower long term debt, there is only a slight difference in the balance sheet comparing assets vs. liabilities. As a result, there is little difference in credit ratings across the political spectrum with strong confidence demonstrated in the bond market. Overall, our states, both liberal and conservative are fiscally sound.Health of State Economies – The Great Recession caused economic trauma across the political spectrum, inflicting pain that went well beyond the housing market. While we are still recovering in some sectors, the overall health of the economy as measured by per capita productivity (Gross Domestic Product and Personal Consumption Expenditures) is markedly lower in conservative states and recovering more slowly. An important issue is raised, however, in asking the question of whether the economic benefits of the recovery are shared by the working class and here we find little partisan difference at the state level.Jobs and Unemployment – Where are the promised jobs? Perhaps the greatest tragedy of the Great Recession was the damage done to the workforce and the minimal effort demonstrated by conservative governments to ease the pain. Unemployment compensation programs in conservative states lagged seriously behind in both participation and compensation paid. The result was a discouraged workforce and a significant loss of workers. We have a smaller workforce now than we did at the beginning of the Great Recession despite overall population growth. Further, the jobs that are available are either not full time jobs or pay considerably less in conservative states. This is nowhere more evident than in the statistics of median salaries for men which have stagnated since 1973. Overall, conservative governance has not delivered the promised quality jobs and median household income, as a measure of prosperity, has seen little improvement in conservative states.The economy is like a very complex machine. If maintained and cared for, it will continue to produce, but if neglected it will fail. The remaining conclusions deal with how well state and local governments care for the most important parts of that very complex machine that is our economy. Specifically, how does government care for the people who make everything work?Education – Investment in K-12 and higher public education consumes a major part of state and local government budgets, but both suffered serious cuts during the Great Recession despite an increase in student enrollment. State budgets and employment figures for education show that conservative states continued to lag behind, however. Examining the results of testing at the K-12 level, students also lagged behind, especially in the critical skills of math and reading. There was overall improvement in science over the period with little partisan difference shown in 2015.The state public university system paints a slightly different picture. Serving the majority of higher education students in the United States, these institutions offer significant advantages to students who are state residents. On average, tuition and fees were nearly half that of more liberal states in 2008, and while costs were shifted to the students during the Great Recession, tuition and fees, especially in 4 year colleges, continued to be significantly lower in conservative states in 2015.Overall, state residents completing high school and college is lower in conservative states, however. The difference becomes more pronounced at higher levels. Based on results, it cannot be said that conservative states are doing a good job of preparing their residents to be productive members of the workforce.Health Care – The most significant event in health care during the Great Recession was the passage of the Affordable Care Act of 2010. This was also the most politically controversial with conservatives in strong opposition, a division that continues today. This is nowhere more evident than in the rejection of the Medicaid expansion by conservative states. Optional state supplemental health programs show a parallel lack of enthusiasm in conservative states. While conservative states employ more health workers and have more public hospitals, the percentage of the population without any form of health insurance is higher in conservative states and is growing worse. The results as measured by death rates, overall and for the most serious diseases, are higher for conservative states despite improvements across the nation. The results for children are especially alarming. Insurance coverage for children is lower and getting worse in conservative states and child access to medical and dental care is correspondingly low. As a result, the two primary measures of infant health, mortality rate and low birth weight, are worse for conservative states. Even more alarming, the long term impact of childhood health is apparent in substantially reduced life expectancy in conservative states.Setting aside the political argument of whether health care is a right or a privilege, from a purely economic point of view poor health is paid for in one way or another. It is hard to imagine that poor health in conservative states is not a factor in the productivity of the workforce.Highways and Public Roads – Constituting a little over 5% of state and local budgets, highways and public roads are the most visible of our public infrastructure. Low salaries allow conservative states to employ slightly more workers, but the results are not encouraging. Highway fatalities are significantly higher in conservative states indicating an unresolved problem in public safety.Law Enforcement and Crime – Nearly 13% of state and local public employees are engaged in the three aspects of law enforcement: police, judicial, and corrections. Like most state and local activities, these three also suffered budget cuts as a result of the Great Recession and staffing was reduced. Corrections is the only category that seemed immune to the cuts and continued to employ more workers in conservative states. The emphasis on “law and order” in arrests, convictions and incarceration in conservative states does not seem to be paying off, however. While overall crime rates declined across the country, nearly every category of crime tracked by the FBI continued to be higher in conservative states. This suggests that there is something wrong in how we are addressing law enforcement and public unrest seems to reinforce that. There has to be a reason that crime rates are higher in conservative states.Emergency Response – Fire departments including emergency medical response are a small, but vital part of state and local governments. Like law enforcement, they also suffered budgetary cuts as a result of the Great Recession, but these cuts were more severe. Fortunately, there is a strong tradition of volunteer participation in providing this essential service. Overall, the results are not encouraging. Despite improved technology, fire related death rates are higher in conservative states with little improvement shown over the period. Likewise, emergency medical response has not been able to reduce deaths due to injury in any significant way, especially in conservative states. This raises the question of why there would be a partisan difference in the effectiveness of fire departments.Safety Nets – If the quality of our civilization is measured in how well we care for those less fortunate, we are falling short, especially in conservative states and especially in the trauma produced by the Great Recession. The great hope of welfare reform legislation in 1996 essentially failed in the objective of moving people on welfare into productive jobs. There were no jobs for them to move into. As a result, families were left without assistance at a time when they needed it most. Conservative states did little to help with only one third or less of the outlay of more liberal states. In terms of basic assistance, the figures are even worse with no state-level augmentation of programs at all in many conservative states.In the case of the disabled, the picture is even bleaker with almost total reliance on federal programs, primarily under the financially troubled SSI and SSD programs administered under the Social Security Administration. State efforts have been small, both in budget and staffing, especially in conservative states. In the final analysis, there does not appear to be much compassionate conservatism at work in the country and especially not in conservative states. Have conservative austerity policies relating to welfare reduced poverty? Sadly, the answer is no and poverty has gotten worse, especially in conservative states.Retirement Security – The most serious fiscal problem facing us over the next couple of decades is the financial security of our retired seniors. Not only is there an increase in the number of seniors due to the retirement of the baby boomers, but they are living longer, their living expenses (especially medical) are increasing, there is a smaller percentage of workers to help support them, and their financial security is abysmal. After decades of encouraging people to buy their own home as an investment that they can be assured will be there if they need it, the Great Recession has taken that last reserve from many and left them with just Social Security. While retirement security is more of a national problem than a state problem, conservative states are doing less to alleviate the problem, especially in less favorable mortgage exclusion laws. Lower incomes before retirement and lower accumulated equity in homes also contributes to the problem in conservative states.The Bottom Line -- It is difficult to avoid a conclusion based on measurable data that conservative governance as practiced in America suffers from a fundamental flaw. In nearly every metric examined, conservative governments have not performed as well as more liberal governments. Even in issues of fiscal governance, conservative governments have emphasized low taxes and low debt, but have not produced healthy economies, either before the Great Recession or in the recovery. For issues of social services, budgets have been cut most severely in conservative states, but this has not produced the desired economic benefit. On the contrary, liberal states have produced economies that are more vigorous and have demonstrated higher productivity.If conservative claims that the private sector meets the needs of the citizenry in the absence of government programs, their argument is brought into question by the measures of results that are detailed in this report. Clearly, the private sector has not picked up the slack in conservative states for the metrics of jobs, education, health care, transportation, law enforcement, emergency response, poverty and retirement security. In the final analysis, conservative governments at the state level have failed to give their constituents jobs, security, and healthy, productive lives.——Thanks and a tip of the hat to Jeffrey Bradford for the edit.

In 2013, the total personal income tax receipts were $1,316,405,000,000.(see Historical Amount of Revenue by Source)Total sales in 2012 (most recent available) were $4,869,032,000,000. (see Monthly & Annual Retail Trade)So, disregarding any effect on sales from changing to a VAT, the VAT would have to be 27% (and that would be on top of current state and local sales taxes)This would certainly affect the poor more than the current tax system; indeed, income taxes are progressive while sales taxes are regressive, because lower income people spend more of their income on goods.But a high VAT would probably discourage spending on taxed goods, encourage barter, encourage black markets and smuggling and so on, thereby lowering the amount of goods sold and requiring further increases in the VAT.