Rhode Island Persuades My Skeptics
Well, it took some time, but apparently, Roland Benjamin’s been persuaded:
The info on shrinking tax receipts was predictable given Justin’s demographic research here.
Because we have replaced around 29,000 people from above 3x FPL (about $60k in household income) with 25,000 below that threshold, the tax receipts should follow that. And they did.
Above $60k in earnings, a household is likely to be paying more in taxes than they are consuming in public services. The inverse will also be true.
My only skepticism with the original research was that tax receipts had not reflected the trend. Today’s front page of the Projo removes any doubt.
“Holding the line” on taxes, when we are clearly chasing taxpayers out will simply preserve this outbound trend.
What the other side (which, to be clear, by no stretch includes Roland) has been desperately hoping to ignore is that these trends have a natural lag. The suggestion of the stunning income outmigration on the charts to which Roland links is that the exodus began in earnest in 2005. That’s income reported on tax returns filed in 2006, some of it no doubt from people who continued to work in Rhode Island, thus making them liable for RI taxes, with some of the government revenue (as I’ve theorized) temporarily boosted by taxes on the activities entailed in packing up and moving.
I’m keeping my eye out for Census and IRS data for 2007, and although I’d be thrilled to find my prediction wrong, I fully expect to see the upper-income categories that have thus far held steady turning south. Once that happens, it’s start-a-fire-or-lights-out time.