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Sunday, May 15, 2005

Pawlenty and tax rates: liar, liar, pants on fire

In today's Star Tribune, Pawlenty once again calls the Senate's tax increase a job killer. He says that if we increase taxes so that the upper income earners in this state pay their fair share of state taxes, we will be killing jobs. This is so false on its face that I figured out it wouldn't be hard to prove that he is simply wrong. Turns out, it isn't hard to prove at all.

Do high-tax states kill off jobs? I figure that a good way to measure this is to take a look at a state's increase in Gross State Product, or GSP. After all, if a state is growing its GSP, it has to be creating jobs. So I went here, the Bureau of Economic Analysis, and downloaded state GSP data for 1999 to 2003, the most recent year available. I then calculated the average rate of GSP growth year over year for that time period (Minnesota's is 5.03%, for example).

Then, I went here, the census page showing per capita tax rates. In his article, Pawlenty talked about using census data, and this table shows Minnesota in fourth place for all taxes, which his article also cites, so I am assuming that this is the table he's talking about.

I then arranged the GSP data in order according to tax rank, and found the average GSP growth for the top ten tax states, as well as the bottom ten tax rates. To nobody's surprise, the top ten tax states beat out the bottom ten tax states in terms of GSP growth by over half a percentage point, 5.03% per year to 4.47% per year. This isn't a lot, but by Pawlenty's logic, the top ten tax states should be seeing lower growth due to a lack of jobs, so any amount of growth over and above the lower tax states is proof that he is dead wrong.

Pawlenty's not this stupid, so why does he continue to claim that making upper income workers pay their fair share of taxes will hurt job growth? Is he just that beholden to the Taxpayer's League?

My data is available upon request in case somebody wants to check to see if Excel can't calculate averages correctly.


At 5:01 PM, May 15, 2005, Anonymous Anonymous said...

Naw, he's not dumb, just a demagogue.

At 9:14 PM, May 15, 2005, Anonymous Anonymous said...

Excellent post. This is the type of work I would like to do if I wasn't such a snarky a-hole.


At 11:00 AM, May 17, 2005, Anonymous Anonymous said...

And why isn't this on the front page of both newspapers or at least in Citypages? I think Pawlenty and the Republicans are being given a big pass from the media on the distortions they use... some body better call them on the fudged stats.

At 12:13 PM, May 17, 2005, Blogger Hammer said...

This comment has been removed by a blog administrator.

At 12:15 PM, May 17, 2005, Blogger Hammer said...

If Pawlenty is really relying on per capita taxation, he's more dishonest than I thought. Per capita taxation is meaningless. Hammer, 3WN.


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