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.