Tag Archives: no remedy for income inequality

Joe Scarborough Tries Fear Mongering

I guess after this morning’s edition of Morning Joe, Joe Scarborough thinks he has laid the arguments about raising taxes to rest. After exhaustive study the data has been recorded on several professional-looking graphics displayed in chart form. One chart clearly showed that raising taxes through charging state income taxes hurt employment and states with no income taxes show upticks in employment (sometimes quite tiny). Thus Joe has shown us that states which raise taxes are bad places to live and will soon lose their businesses and their residents. I guess this is supposed to convince us that we can’t get greater equality in incomes by raising taxes. Businesses will simply move elsewhere.

To be honest Joe Scarborough did not come up with this data. Economic analyst Steve Rattner brought in the charts we looked at this morning. But Joe was clearly excited by the data which I felt was way too simplistic to prove anything about taxes and unemployment.

Logic tells us that just because two variables rise together (as with income taxes and business moving out of states), or if two variables look like they have an inverse relationship (as when income taxes go up, employment goes down) does not mean that a cause-effect relationship exists. A classic example of this I once heard suggests that ice cream eating causes drowning. Since both factors go up in summer we might assume a correlation, but this is such a good example because we can see that this logic is ridiculous and we can see it right away.

Joe Scarborough talks about the state of Connecticut, which he obviously loves, because Connecticut has recently decided to collect more revenue through taxing incomes and Joe is obviously thinking he may have to find another state to love. He compares Connecticut to Florida and Texas where there is no income tax. Texas showed perhaps the only statistically significant rise in employment.

While it does seem fair to say that businesses have been leaving states with high taxes (like my state of New York) they have actually also left much of the Northeast. Some have moved South but far more have left the country altogether. America cannot compete right now with nations full of inexpensive labor and little regulation of either safety or environmental hazards.

Apparently Joe Scarborough now feels that he has tilted his sword against the folks who want more income equality and he has vanquished his foes. Taxes cost jobs. Boom!

Well raising state taxes on income or property or even corporate taxes is certainly not the only way we could achieve greater income equality. Sadly the more businesses that leave a state the greater the burden on the taxpayers in that state to maintain a certain level of services. Eventually it becomes either worth it to chip in more or there must be lifestyle changes.

I don’t recall anyone suggesting that states either increase or institute a brand new income tax. I do recall that Republicans favorite argument against higher taxes is fear mongering about job loss. In most of the Northeast we really should be fairly fearless by now because we have lost most of the jobs that offered good wages and we have pretty much lost all the companies that could profit by leaving.

The reason we cannot rely on raising income taxes is because incomes are not going up. CEO’s are fairly adept these days at avoiding state and local taxes. They know that they “have the con” right now. If they squeal, the states will find them a tax break.

There are certainly plenty of other taxes to raise or loopholes to close at the federal level if we want to prevent all the money from being hoarded by those at the top. If states are adding taxes it is probably because they have to in order to survive or they need to make some improvements which require new expenditures.

Joe Scarborough may be a bit confused about interpreting data, but he does have really great hair.



By Nancy Brisson