Sunday, December 19, 2004

Blue-state Living
It ain't cheap: "One index of cost-of-living differentials shows that an income of $130,000 in Connecticut is equivalent to $90,000 in Oklahoma. That means families at those incomes are equally well-off and under standard tax theories about fairness should pay the same share of their income in taxes. Currently, a family of four making $130,000 pays $20,450 in income taxes, or 15.7%, while the family making $90,000 pays $8,450, or 9.4%. If both families were taxed at the Oklahoma rate, the Connecticut family would pay $8,200 less."

Somehow doesn't sound quite fair to me.

1 comment:

Anonymous said...

That was a really disingenuous article. The complaint was that red states tend to use more services than they pay for. It doesn't then follow that blue states want taxes to be cut, although that was the WSJ assumption. It's more likely that blue states just want to get their fair share of federal taxation.

If both families were taxed at the Oklahoma rate, there wouldn't be enough money to pay for the federal services that Oklahoma gets. And based on the educational, health care, and crime records of both states, it looks like Connecticut is actually putting its tax money to good use. You have to pay to get quality, no matter what you're buying. Although taxes are not inherently good, I don't think they're inherently bad, either, any more than paying dues to a private club or a gym membership are inherently bad.

If Oklahoma were getting the same results as Connecticut with their lower tax rates, I think it wouldn't sound fair and that Connecticut should think about what they're doing wrong. But they're really not similar. (And it pains me to say this because I think Connecticut is a soulless and annoying New-York-wannabe state.)