Economic Development

What the 99% Are About One More Time: The Social Impact of Inequality

This past week, in a response to U.S. House Majority Leader Eric Cantor, this blog addressed the gap between the myth of equal opportunity in America and the reality of increasing immobility. New York Times columnist Charles Blow is on a similar theme today in a column called “America’s Exploding Pipe Dream.”  

Third and State This Week: July Jobs, Public Sector Wages, an Insurance Marketplace and Why People Move

This week, we blogged about the future of purchasing health care insurance, the state of employment in Pennsylvania, the wages of public versus private sector workers and more!

IN CASE YOU MISSED IT

  • On public sector wages, Stephen Herzenberg highlighted the recent, albeit not surprising, findings of an Economic Policy Institute study documenting that jobs in Pennsylvania state and local government are not the way to get rich.
  • On unions, taxes and migration, Michael Wood debunked claims that the outmigration of Pennsylvania taxpayers can be linked to unions. Most of the departures between 2004 and 2009, Mike writes, were to states with warmer climates.
  • On health insurance, Christopher Lilienthal blogged about the creation of a competitive health-insurance marketplace in Pennsylvania and how that will make purchasing high-quality and affordable health care easier and more efficient.
  • On jobs and the economy, Sean Brandon sorts through the recent labor market data and explains why we shouldn't put too much stock in a single month's jobs numbers, good or bad.

More blog posts next week. Keep us bookmarked and join the conversation!

Could It Be the Weather?

The Delaware County Daily Times reprinted a story from the PA Independent (the state news service started by the Commonwealth Foundation) which mistakenly blames unions for the out-migration of taxpayers in the state.

Here is the claim:

The Tax Foundation, a Washington, D.C., tax policy nonprofit, tracks tax returns filed in every state to determine how shifts in population affect working by tracking the Social Security numbers of income tax returns filed with the IRS each year.

Between 1999 and 2008, Pennsylvania saw an overall decline of 84,000 tax returns. The top three destinations for people leaving Pennsylvania during that time — Florida, Virginia and North Carolina — are all right to work states. The data is the most recent available.

There are a couple of problems with this rationale.

Getting Cheeky with Tax Data, Part 3

This is the final part of three-part series running this week on Third and State.

On Wednesday, we highlighted the flaws in a Wall Street Journal editorial that was caught being, shall we say, less than truthful in its presentation of data on taxes.

Then, yesterday we wrote about conservatives here in Harrisburg, like the Commonwealth Foundation’s Nathan Benefield and Jonathan Humma, who want to make the case that Pennsylvania's business climate is bad because of taxes, ergo we should cut corporate taxes and shift more of the tax burden away from the wealthy and onto the rest of us.

Richard Florida has a piece at the Atlantic reviewing the relationship between "business tax competitiveness" and various measures of state level economic performance where he concludes:

The bottom line is this: Lower state investment tax burdens aren't associated with stronger state economies, and higher investment tax burdens aren't associated with worse ones. Tax cuts may be an effective political strategy and lowering business and investment taxes may appeal to corporate interests and attract campaign contributions, but they have little relation to state economies.

And don't forget that in Pennsylvania, middle-income taxpayers already pay more of their income in state and local taxes than the wealthy do.

This all reminds me of a great Upton Sinclair quote:

It's difficult to get a man to understand something, when his salary depends upon his not understanding it!

In Case You Missed It: Third and State Blog for Week of March 28

Senator Jeff Piccola expanding school vouchers concept to include Pennsylvanians trapped in low-performing families? A state worker stunned to learn her mid-level administrative job is no pathways to riches? A Corbett speechwriter struck with a rare illness afflicting writers of overwrought clichés?

Either it's a particularly zany news day — or it's the first of April!

In Third and State's Friday Funny, we pass on an April Fool's take on the latest un-news coming out of Harrisburg. (Our thanks to a loyal blog reader for passing this one along.)

In other news this week, we blogged about the taxes gas drillers do (or don't) pay, why the minimum wage matters, imaginative tax avoidance strategies, and much more! 

IN CASE YOU MISSED IT:

  • For much of the week, it was the Mark Price Show at Third and State. On wages, Mark explained just how much the minimum wage matters and why the failure of policymakers to peg it to growth in productivity (or even inflation) has had a wide-ranging impact on American society.
  • On jobs and unemployment, Mark blogged about imaginative tax avoidance strategies at work at General Electric.
  • And on fiscal and monetary policy, Mark wrote about the Federal Reserve's policymaking role and why it is so important to the economic recovery.
  • Finally, Michael Wood has a post on the taxes that natural gas drillers in the Marcellus Shale are (or are not) paying.

More blog posts next week. Keep us bookmarked and join the conversation!

Governor Needs a 'Vision' Check on Marcellus Shale

Governor Corbett claimed in a recent Patriot-News story that Marcellus Shale gas drillers have paid $71 million in sales taxes over the last two years as proof that the industry is paying an adequate share of taxes. It's a big number, but isn't likely accurate for a number of reasons.

Amazon Takes Its Ball and Goes Home over Sales Tax Bill

According to an article in Monday’s State Tax Notes (subscription required), Amazon has decided to shutter a warehouse facility in Texas rather than pay a $269 million sales tax bill issued by the Texas Comptroller. Lost in this foot-stomping exercise are 119 warehouse jobs and any future plans of expanding in the Lone Star State.

The Texas business community is up in arms about this, but not for the reasons you would think. The President of the Texas Retailers Association said in a statement:

"We sincerely regret that Amazon's irresponsible action appears to be resulting in 119 Texans being told their jobs are being terminated. However, to allow Amazon's current practices to continue is blatantly unfair and injurious to the 1.9 million employees of Main Street Texas retailers who faithfully collect and remit sales taxes to the Comptroller."

The dispute is a common one between Amazon and the states. Amazon claims it has no legal right or duty to collect sales tax from its customers, but states like Texas, Colorado, North Carolina and New York are fighting back. Pennsylvania hasn’t joined the pack — yet.

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