Mine, Washington State, ranks 3rd in the nation, ugh! This report comes from The Tax Foundation who claim that they’ve been around since 1937.
Their report centers on state and the average of local sales taxes. Don’t be misled however, this report does NOT include state income taxes, nor does it include state property tax nor state business taxes! States like Oregon who have no sales tax whatsoever, but do have income tax are ranked low on this list but might not be so low when all state taxes are considered. The worst of the worst are states like New Jersey and California that have high sales taxes, high property taxes, high business taxes, AND high state income tax. The combination of all taxes is referred to as the “tax burden” and is also reported by the Tax Foundation.
The varying tax schemes are indeed confusing, but give the market time to figure it out and it will definitely adjust. Vancouver, Washington, for example (on the border of Washington & Oregon), has been one of the fasted growing cities in the state for quite some time. A very large reason is that people are playing the game of residing in Washington that has no income tax, but then they do their shopping in Portland where there are no sales taxes, thus they are enjoying the best of both worlds.
Of course yesterday I showed how the Federal Government is spending far more, but taking in way less. The states are in a similar situation where their costs are rising yet their incomes are falling. We are now experiencing marginal state bond sales and that is only going to get worse as tax revenue declines. The only way out for the states is to reduce spending… or get bailed out by the Federal Government. The Federal Government, though, has a not-so-little problem in that they are definitely running up against the limits of debt and money printing.
I’d like to be able to show you the Fed’s charts on state tax revenue collections, but they have not updated any of the charts since 2008. They should be updated soon and I’ll post them when they are, I am expecting a cliff diving horror show. We know it’s bad because deficits are widening now at an accelerating pace as indicated in the latest paper from the Center on Budget and Policy Priorities, printed at the beginning of this month and showing that 48 states are now running sizable deficits:
Indeed, it would seem that the states have hit the proverbial wall. How’s yours doing?
Kansas – The Wall:
RANsquawk Preview: FOMC Decisions - 30th July 2014
55 minutes ago