Discuss Detroit Archives - Beginning January 2006 Jobs Are Flocking to Low-Tax States Previous Next
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Karl
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Username: Karl

Post Number: 2362
Registered: 09-2005
Posted From: 72.25.177.194
Posted on Tuesday, May 16, 2006 - 11:31 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

'Live Free or Move'
Jobs are flocking to low-tax states for a reason.

BY LAWRENCE J. MCQUILLAN AND HOVANNES ABRAMYAN
The Wall Street Journal - Tuesday, May 16, 2006 12:01 a.m.

Voters will elect governors in 36 states this year. And as they decide who to send to the governor's mansion, they will also be shaping the economic future of their state. On taxes, the gubernatorial candidates fall into one of two camps. Either they believe that the best way to close a budget gap is to raise taxes. Or, like Ronald Reagan and George W. Bush have done from the Oval Office, they believe in raising revenue by growing the state's economy with tax cuts.

Now new data is out and it shows that the states that embraced supply-side tax cuts are not only financially more sound and enjoy stronger economies, but they are draining residents away from the states that opted for high taxes. The Pacific Research Institute has crunched the tax numbers in all 50 states and published the "U.S. Economic Freedom Index" ranking all states according to how friendly or unfriendly their policies were toward free enterprise and consumer choice in 2004--the most recent year that comparative data is available for each state. It's clear that the economic policies of 2004 determined where each state fell in the rankings, and shaped 2005 economic performance.

It isn't just fun to pinpoint which states are getting it wrong. Where a state falls on the U.S. Economic Freedom Index also indicates how likely it is to experience real economic growth over the long term. Individuals looking to open a new business, expand operations or market new products weigh the comparative costs and benefits of different locations. They evaluate local universities, transportation networks, labor skills, market size and even the weather. They also assess the policy climate. Economic freedom--a favorable state tax, regulatory, and legal climate--attracts entrepreneurs and capital, thereby increasing jobs and wages.

In 2005, per capita personal income grew 31% faster in the 15 most economically free states than it did in the 15 states at the bottom of the list. And employment growth was a staggering 216% higher in the most free states. It hasn't been a "jobless recovery" in states that have adopted pro-growth tax and regulatory policies.

Compared to the rest of the world, the U.S. has a uniformly pro-growth economic climate. But policies vary dramatically from state to state and the biggest single policy states have to get right to out-compete the other states for jobs and high-skilled workers is taxes. Taxpayers paid 14% less in "effective tax rates" in 2005 in the most economically free states than did the taxpayers in the least free states. Effective tax rates are based on what people actually pay after deductions, exemptions and credits. This helps explain why entrepreneurs are attracted to more free states and why personal income and jobs are growing so much faster there.

Though typically tax cuts are opposed with the argument that slashing rates will force state revenue to fall, new data from the Nelson Rockefeller Institute shatters the myth that budget deficits are caused by supply-side policies. In 2005, the 15 states with the most economic freedom saw their general fund tax revenues grow at a rate more than 6% higher than the 15 least free states, despite their lower effective tax rate. Instead of blowing a hole in state budgets, lower tax rates rewarded productivity and risk-taking and allowed the economy to grow. As the economy expanded it also generated more revenue for the state Treasury as capital and people flowed in. Census data shows an astounding 245% difference in net state-to-state migration rates in 2005 between the freest states (net inflow) and least-free states (net outflow). "Live Free or Move" is fast becoming the national motto.

California, Connecticut, Illinois, Massachusetts, New York, Ohio, Pennsylvania, and Wisconsin all elect governors this year. And all languish near the bottom in terms of economic freedom. They have all also struggled with significant budget deficits. Candidates from California and Ohio highlight the stark differences on taxation.

California gubernatorial candidate Phil Angelides vows, if elected, to raise the upper tax rate on individuals to 12% from 10.3%, in part to close California's $7 billion deficit. But this high rate, the nation's highest, has not prevented California from suffering a multi-billion-dollar budget gap. What the 2005 fiscal facts show is that raising it even higher will likely make the problem worse in the long term. When Gov. Pete Wilson raised taxes in the early 1990s, hoping to close a budget gap, revenues actually fell and deficits lingered. The 2005 numbers foretell the same outcome with Angelides's tax-hike scheme.

On the other hand, Ohio gubernatorial candidate Ken Blackwell vows, if elected, to cut taxes and to support a tax-and-expenditure limit to curb the growth of state spending. The 2005 numbers clearly support his approach to economic prosperity. Low taxes expand economic opportunities and lift a state's personal income, employment, and tax revenues. It's a lot easier to close a budget gap when the economy is growing and more money is flowing into the state's coffers (assuming the legislature doesn't spend the new revenue faster than it comes in).

Voters might want to keep some of these facts in mind and reject the flawed tax-hike approach when they head to the polls for the primaries in the coming months and the general election in November. Supporting candidates and policies that promote economic opportunity through cutting taxes is the best way to fiscal health for both taxpayers and states. Lower taxes, less burdensome regulations and a reasonable civil-justice system rejuvenate economies, lift incomes and even fatten state revenues.

Mr. McQuillan is director of business and economic studies and Mr. Abramyan is a public policy fellow at the Pacific Research Institute.
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Karl
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Username: Karl

Post Number: 2363
Registered: 09-2005
Posted From: 72.25.177.194
Posted on Tuesday, May 16, 2006 - 11:37 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

The results are here:

http://www.pacificresearch.org /pub/sab/entrep/2004/econ_free dom/00_summary.html

Michigan fell to #34 from #27 in 1999.
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Gildas
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Username: Gildas

Post Number: 642
Registered: 12-2004
Posted From: 147.240.236.9
Posted on Tuesday, May 16, 2006 - 11:48 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Good article Karl, People who think high taxes are the answer to economic problems only need to look out thier windows at the great job Detroit has done with its extremely high taxes.

No one has ever been taxed into prosperity.
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Rustic
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Username: Rustic

Post Number: 2451
Registered: 10-2003
Posted From: 130.132.177.245
Posted on Tuesday, May 16, 2006 - 12:33 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Several weak points come to mind:

First, percent comparisons of growth favors states that are initially income poorer and have smaller economic bases thus percent growth is greater for equal effects. (e.g. compare giant Walmart's effect on tiny Arkansas to big Intel's effect on giant California, or hell for that matter giant WALMARTs effect on giant California (where it probably directly and indirectly employs more people than in Ark))

Second, they should somehow figure out a way to factor out pensioners income (who generally are moving to low cost states) since they are living off of saved money (often earned in high wage states). This should be factored out since this in and of itself is simply the shifting of previously earned wealth from investment to consumption -- in other words these retirees are not PRODUCING any goods or services for their "incomes". It is not completely acccurate to compare this "income" to that of an active wage earner who does contribute to the economy with their labor. Of course the fact that retirees are spending this "income" does raise the boat in their states and the fact that they are doing it often using $$$ earned in high wage states is a double whammy against high wage states BUT it isn't even closse to the same economic impact of someone who is gainfully employed and receiving wages for producing goods and services today. Further the act of the retiree spending his pension draws that money from the investment pool and has a net NEGATIVE impact on the capital markets (assuming there are increasing numbers of retirees and that RELATIVE wages are dropping).

Third, the "migration" metric they use is entirely bogus unless they somehow include the deleterious effects of illegal immigration. For example, if you happen to believe that illegal immigration represents a net burden (policing, social costs, etc.) then this burden is much more signicifant in the border states than elsewhere so there shold be a NEGATIVE tooling factor to the "migration metric". For another example if you happen to believe that illegal immigration represents a large invisible cash economy (operating disproportionately in certain states) that has an effect of shrinking the legal economy of these states relative to more law abiding states -- this again favors border states as well as small population/low wage states in economic comparisons.

(Message edited by rustic on May 16, 2006)
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Fnemecek
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Username: Fnemecek

Post Number: 1652
Registered: 12-2004
Posted From: 68.255.240.193
Posted on Tuesday, May 16, 2006 - 2:17 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Rustic, why are you ruining their "economic analysis" with facts and logic? Why can't you just be happy with them throwing facts around randomnly?
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Karl
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Username: Karl

Post Number: 2368
Registered: 09-2005
Posted From: 72.25.177.194
Posted on Tuesday, May 16, 2006 - 2:26 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Yeah Rustic, as other states grow (according to "them throwing facts around randomnly") and Michigan falls from #27 to #34 (according to "them throwing facts around randomnly" you should "just be happy" like Fnemecek.

You can see the abundance of "facts & logic" right outside your window - all the huge corporations moving in, new skyscrapers being built, and moving vans full of middle class folks driving up prices in all of Detroit's bustling, safe, low tax neighborhoods.

Alfred E Newman would be proud of both of ya:

What me worry?
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Mw2gs
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Username: Mw2gs

Post Number: 192
Registered: 03-2005
Posted From: 68.248.42.127
Posted on Tuesday, May 16, 2006 - 2:39 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Is this one of those Devos for Governor advertisements?
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Rustic
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Username: Rustic

Post Number: 2454
Registered: 10-2003
Posted From: 130.132.177.245
Posted on Tuesday, May 16, 2006 - 2:41 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Karl, ya trying to make me mad or something? well
hoohah
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Karl
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Username: Karl

Post Number: 2370
Registered: 09-2005
Posted From: 68.230.22.99
Posted on Tuesday, May 16, 2006 - 2:48 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thank you, Rustic - you and Livedog2 really shine when it comes to finding those - woulda coulda shoulda, you know what I mean!

Thanks:-):-)
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Hamtramck_steve
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Username: Hamtramck_steve

Post Number: 2951
Registered: 10-2003
Posted From: 136.181.195.17
Posted on Tuesday, May 16, 2006 - 2:51 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Wait, I thought that all of the tax cuts Engler and Company pushed through during the 90's were supposed to make the future (read, today) more prosperous.

Isn't that they said?
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Karl
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Username: Karl

Post Number: 2372
Registered: 09-2005
Posted From: 68.230.22.99
Posted on Tuesday, May 16, 2006 - 2:56 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

HS - Were the tax cuts coupled with cuts in spending? Why is Detroit still considered a very high tax city, with low returns on investment?
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Gildas
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Username: Gildas

Post Number: 645
Registered: 12-2004
Posted From: 147.240.236.9
Posted on Tuesday, May 16, 2006 - 3:21 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Regardless of where you fall on the political spectrum, Detroit and MI have real problems. Unemployment is down across the nation, MI is a one state recession, so its not "Blame Bush for the worlds problems" we need to demand action and accountability from our state and local leaders. On BOTH sides (and everyone in the middle.)

Our own newspapers speak of our problems (See Below) and if Detroit is in such wonderful shape, how could the "Fabulous Riuns of Detroit Site" even exist, that prime real estate would be snapped up and redeveloped before the film even was printed.

But sadly that's not the case. We have real problems in our city and state and taking some personal responsibility is a nice first step. Otherwise we take our cues from our elected leaders and them from us: point fingers elsewhere, its done wonders for us thus far.


http://www.detnews.com/apps/pb cs.dll/article?AID=/20060411/O PINION01/604110304

Detroit needs tax deals to build a stable base

Without abatements, city couldn't lure residents, investors.

Detroit is a very expensive city, and without tax relief, it has little chance of building a critical mass of residents and businesses to sustain itself.

Yes, the tax abatements cost a lot of money. As The Detroit News reported Sunday, the city is losing $67 million a year in taxes because of special breaks given to residents and developers.

But with a property tax rate of approximately 67 mills, it is a hugely expensive proposition to own a house or a business in the city. Meanwhile, city services are marginal.

There has to be a reason for investors and residents to come to Detroit -- or even stay. The city is losing 1,000 residents a month. Detroit's City Council must consider these facts as it decides Wednesday on tax breaks for a proposed condominium development at the old Book Cadillac Hotel and other projects in the future
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Burnsie
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Username: Burnsie

Post Number: 417
Registered: 11-2003
Posted From: 35.12.21.217
Posted on Tuesday, May 16, 2006 - 3:38 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

"Detroit's City Council must consider these facts as it decides Wednesday on tax breaks for a proposed condominium development at the old Book Cadillac Hotel"

I thought the final piece of financing had been completed. Looks like the following article jumped the gun.
------------------------------ ---------------------
Freep April 29, 2006

"The City of Detroit's Police and Fire Pension Fund has approved a $15-million investment in the ...Book-Cadillac Hotel.

"George Jackson...said the fund's approval...is the final piece needed...to finance the work. A financial closing is expected in the next several weeks, with construction work to begin immediately."
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Ron
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Username: Ron

Post Number: 139
Registered: 03-2006
Posted From: 70.212.70.40
Posted on Tuesday, May 16, 2006 - 3:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Interesting article, but a question for those more skilled in economics/business than I.

From my cursory reading, the article seems to indicate that PEOPLE are going to the low-tax states, not necessarily JOBS. Does anyone know what factors go into the decision for where a large business will open, or locate? Is one of the factors a skilled population?

If so, what comes first, the jobs that attract a skilled population or the skilled population that attracts the jobs?

Also, are there other possible causes for relocation of people to the "high freedom" states, other than low taxes? I really cannot see anyone saying "Honey, we can save 2% on our income taxes by moving to BFE, Montana. Pack up the kids and the dog into the car, and let's go."
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Livernoisyard
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Username: Livernoisyard

Post Number: 699
Registered: 10-2004
Posted From: 69.242.223.42
Posted on Tuesday, May 16, 2006 - 3:58 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

It seems that Ford and GM will eventually be only 1/2 or 2/3 of their former selves. Their assembly-line job losses have a multiplier effect of three or four among the engine or powertrain jobs. The multiplier effect among the Tiers has (arbitrarily?) previously been pegged at ten for each assembly worker, according to security analysts.

Clearly, a large number of low- to semi-skilled jobs will be gone by the end of this decade. And professional and "trades" employment in the auto sector will suffer through outsourcing, attrition, and fewer contracts for IT, managers, engineers, etc. Much of that is concentrated in Metro Detroit.
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Bob
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Username: Bob

Post Number: 985
Registered: 11-2003
Posted From: 64.12.116.204
Posted on Tuesday, May 16, 2006 - 4:06 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

It is something like ever one auto job supports 9 spin-off jobs. Livernoisyear speaks the truth and is scary about the effects on our area. It would be nice to offset these with gains elsewhere, but the that does not seem to be happening, for a variety of reasons.
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Rustic
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Username: Rustic

Post Number: 2457
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Posted From: 130.132.177.245
Posted on Tuesday, May 16, 2006 - 4:44 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Article was about an "Economic Freedom" ranking report and didn't mention Michigan by name.

The report ranks 50 states by a self constructed methodology (using madeup terms, read the report to see what I'm talking about) with scores from 18.18 to 39.50. (Gotta luv the four digits of precision, makes you really believe the validity of the numbers, lol!) Michigan's score was 27.90 (again note 4 sig figs, yay crap economics!). 31 states had a lower score, 13 states had a higher score and 6 states had ~ the same score (rounding sensibly).

The report then colored in a map with each state colored wrt which ranking decade they fell into.
better ded than red
decade 1-10 represented ~4 points in the ranking range, decade 41-50 represented ~10 points in the ranking range. The other 3 decades represented ~2 points each in the ranking range.

OKAY lets see if what they say makes sense comparing pink and green states that happen to be near neighbors with each other since that makes the strongest case for their methodology and conclusions since the yellow, brown and blue states are pretty similarly ranked and sticking with nearest neighbors avoids variations in weather, retirees, illegal immigrants numbers etc avoiding some of my earlier points. OKAY ... Is MO sucking jobs from IL? IS NH booming bigtime sucking all a them jobs from MA, CT, RI and NY? If it isn't just completely obvious that ALL of this is happening ... does this report make sense even prima facie?

There is nuthin wrong with not liking taxes, even for legit reasons (economic, political, religious whatever) but silly stuff like this report as written hardly supports your case.

(Message edited by rustic on May 16, 2006)
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Livernoisyard
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Username: Livernoisyard

Post Number: 703
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Posted From: 69.242.223.42
Posted on Tuesday, May 16, 2006 - 5:09 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Indiana has some 2000 acres just waiting for either Honda or Toyota to locate their new, expected assembly plants. That's probably why Granholm is in Japan today, plugging away for Michigan.

The auto expert at CSM interviewed on WJR today pegged Michigan's chances of getting the Honda plant at only around 10% due to Michigan added distance from Honda's base in Ohio. Michigan is somewhat insignificant to Honda. Ohio, for example, has 16 jobs at Honda versus zero for Michigan.

(Message edited by LivernoisYard on May 16, 2006)
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Futurecity
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Username: Futurecity

Post Number: 290
Registered: 05-2005
Posted From: 69.215.16.209
Posted on Tuesday, May 16, 2006 - 5:18 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

It would be interesting to compare the map above with a map that indicated each state's job growth/loss.
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Rustic
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Username: Rustic

Post Number: 2458
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Posted From: 130.132.177.245
Posted on Tuesday, May 16, 2006 - 5:23 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

LY, just for the record OHIO is a red state (red meaning bad tax freedom state).
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Gildas
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Username: Gildas

Post Number: 646
Registered: 12-2004
Posted From: 69.216.104.155
Posted on Tuesday, May 16, 2006 - 6:29 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The map is interesting, a recent article in Forbes mentioned that job leaving Michigan are just as likely to end up in Indiana as India. If that's true perhaps we should take notes and start trying to win jobs back to MI.
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Livernoisyard
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Username: Livernoisyard

Post Number: 704
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Posted From: 69.242.223.42
Posted on Tuesday, May 16, 2006 - 6:32 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

"LY, just for the record OHIO is a red state (red meaning bad tax freedom state)."


Maybe that will have a bearing if Honda chooses Indiana.
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Ray
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Username: Ray

Post Number: 696
Registered: 06-2004
Posted From: 69.215.67.71
Posted on Tuesday, May 16, 2006 - 9:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The property taxes in Michigan are crushing because people who move here get bitch slapped with taxes 3 or 4 times higher than most of their neighbors. Our familiy's taxes are especially high, higher after taxes than our mortgage interest and tripple what we paid in CA for a simliarly priced home.

Property taxes consumed 20% of our familiy's after tax income last year. Adding insult to injury, the taxes are so I that you getted kicked into the AMT, so you can't deduct them on your federal income tax.

I knew this was coming when I moved here, but after two years I can't stand it. We get basically nothing in return for this expense and the burden is ravaging the savings we would otherwise be putting aside.

I fantasize about leaving, but we can't sell our house. Anyway, the state can suck me dry for a few more years but then I'm done, and when I leave I'm taking my (nonautomotive) job and the jobs of my employees with me.
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Livernoisyard
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Username: Livernoisyard

Post Number: 707
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Posted on Tuesday, May 16, 2006 - 9:52 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

You cannot leave, Ray. When enough of you leave, who will pay for all the "free" money coming from all levels of government?
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Fnemecek
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Username: Fnemecek

Post Number: 1653
Registered: 12-2004
Posted From: 70.227.12.44
Posted on Tuesday, May 16, 2006 - 9:55 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Yeah Rustic, as other states grow (according to "them throwing facts around randomnly") and Michigan falls from #27 to #34 (according to "them throwing facts around randomnly" you should "just be happy" like Fnemecek.



Oh, grow up, Karl.

No one is denying that Michigan has some serious problems. We as a State need to overhaul our tax structure completely.

It just pisses me off when folks like you resort to "analysis" from pundits who obviously failed Econ 101 to "demonstrate" it.
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Fnemecek
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Username: Fnemecek

Post Number: 1654
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Posted From: 70.227.12.44
Posted on Tuesday, May 16, 2006 - 9:58 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Our familiy's taxes are especially high, higher after taxes than our mortgage interest and tripple what we paid in CA for a simliarly priced home.



You must've bought one hell of piece of property, Ray. California has some of the most outrageous property values in the nation.

(Message edited by fnemecek on May 16, 2006)
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Jiminnm
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Username: Jiminnm

Post Number: 573
Registered: 02-2005
Posted From: 68.35.85.184
Posted on Tuesday, May 16, 2006 - 10:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Actually, Rustic, your comment on Intel in California is a non-starter. The largest Intel chip manufacturing facility is here in New Mexico. They are continually growing, which helps our economy, but the real economic growth is coming from small and new business. For example, a success story here is Eclipse, a small jet manufacturer that didn't exist 5 years ago. I couldn't even estimate the growth in construction since we arrived here 7 years ago.

BTW, our property taxes here are about a third of those we paid in Michigan for a similarly valued home. Commercial property taxes are around 40-45% of those in Michigan, with no SBT.
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Rustic
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Username: Rustic

Post Number: 2459
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Posted From: 71.234.183.131
Posted on Tuesday, May 16, 2006 - 10:36 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Jiminnm, the report cited in this article ranks NM 37th with a score of 28.37 and MI 34th with a score of 27.90. So do ya believe this report or not? a lil bit LESS economic freedom in NM vs MI in your experience or is this report fulla sh*t? (BTW, I was throwing out Intel as merely an example, however Intel is a big company and they have stuff in lots of states including CA including their HQ and much of their R&D, that they have stuff in NM hardly minimizes their footprint in CA).
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Karl
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Username: Karl

Post Number: 2376
Registered: 09-2005
Posted From: 68.230.22.99
Posted on Tuesday, May 16, 2006 - 11:31 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Ray:

Find comfort in supporting Kwame, all his bodyguards, and Mama's Lincoln Navigator - oops, with all the heat from the press I think he got rid of the LN, maybe he bought a less-conspicuous Lexus - with all those taxes. As you glance around the neighborhood, you can see that all those taxes are buying city services that are doing a better job than what you got in CA. Perhaps you were protected by Prop. 13?

As Fnemecek observes that Michigan falls from #27 to #34, his reaction is: "Oh, grow up, Karl" and then says "It just pisses me off when folks like you resort to "analysis" from pundits..." but then says: "No one is denying that Michigan has some serious problems. We as a State need to overhaul our tax structure completely."

Fnemecek = clueless

LivernoisY said: "You cannot leave, Ray. When enough of you leave, who will pay for all the "free" money coming from all levels of government?"

ROFLIAZ:-)

Jiminnm & Rustic: Kiss & make up, you're on the same side, even tho Rustic misbehaves on occasion.

Jiminnm - aren't low property taxes great? Leaves lots left over to spend in local busineses which = sales tax for city & state + $$ for local businesses to spend in the city which = more revenues for local busineses + more revenue for the state = more roads, jobs, infrastructure + more $$ spent with local businesses including more cars purchased, etc etc.

Rustic - NM is #37 simply because the authors drove thru ABQ on I-40 - Jiminnm, have you fixed that road yet???

(Message edited by karl on May 17, 2006)
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Irish_mafia
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Username: Irish_mafia

Post Number: 510
Registered: 10-2003
Posted From: 69.222.54.70
Posted on Wednesday, May 17, 2006 - 12:46 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Karl,

Good post. It looks like some of the usual push-back in the crowd but its always good to supply the info...you never know when one is ready to make that transition from the dark side.
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Gildas
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Username: Gildas

Post Number: 648
Registered: 12-2004
Posted From: 147.240.236.9
Posted on Wednesday, May 17, 2006 - 11:00 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I love high taxes and poor services. Say Yes to Michigan.

Do we still use that line?
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Fnemecek
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Username: Fnemecek

Post Number: 1656
Registered: 12-2004
Posted From: 69.215.246.97
Posted on Wednesday, May 17, 2006 - 11:05 am: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Fnemecek = clueless



Clueless because I paid attention in Econ 101???

Keep telling yourself that. Maybe someday it'll become true.

While you're at it, why don't you explain why Ohio, Hawaii, California and New York are doing better than us economically - even though they scored worse than us on this "economic freedom index" that you're so proud of?

If there really was a correlation between that chart and reality, the exact opposite would be true.

Yes, Michigan needs to cut taxes (and in the case of the SBT - change the way the tax is calculated) but that doesn't make the third-grade nitwits at the Pacific Research Institute any less of group of nitwits.
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Karl
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Username: Karl

Post Number: 2394
Registered: 09-2005
Posted From: 68.230.22.99
Posted on Wednesday, May 17, 2006 - 11:18 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

No, clueless because you haven't moved beyond Econ 101.

Fnemecek said: "that doesn't make the third-grade nitwits at the Pacific Research Institute any less of group of nitwits."

Nitwit or not, Econ 101 grad or not, please post whatever writing you've done on the subject. Of particular interest to DY'ers would be anything deemed worthy of publication in the Wall Street Journal, though I'll applaud ya if it's the Weekly Reader.
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Rustic
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Username: Rustic

Post Number: 2462
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Posted From: 130.132.177.245
Posted on Wednesday, May 17, 2006 - 12:31 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

So does anyone want to talk about the original article or the report it cited or do you just wanna spout propaganda? I understand that it is more comfortable to spout sound bites and clever catch phrases but it is way more fun IMO to engage in direct discussion, anyone wanna give it a try?

IMO the report cited in the article is very weak on two fronts (1) methodology and (2) just commonsense which I discussed earlier, okay hows about a third one (3) anecdotal examples.

Y'all wanna beat up on michigan, fine, maybe it deserves it ... but many of the states who have sucked away AUTO jobs in the last few years (KY, AL, MS, TN) rank roughly the same in terms of "economic freedom" (btw that includes bonus points for "right-to-work" states, read the link report summary). Also OH which ranks much worse than MI has done well by TOYOTA and HONDA recently (it is dificult to imagine rankings shifting significantly given the methodologies employed). SO no "economic freedom" trend that I see evident.

Wanna look at NEW industries? OKAY FINE. Startups: Well startup hotbed states are CA, TX, and MA (two reds and a blue (btw, if you consider per captia weighting MA spanks giant CA and TX even with with an economy free-zone (!) like NH just up I-95, wassup wit'dat?)) Second tier startup hotbeds? I dunno, maybe MD, GA, FL, NC (yellow and blues). Third tier startup hotbeds: maybe VA, OH, CO (two greens and a red). Any consistency here with regard to this ranking report? nope.

OKAY maybe startups are a bad one to consider since startup go where the seed money is. Fine.

Well what about foreign companies choosing sites in the US? Or other existing companies moving about the US. Seems to me they generally choose locations depending on their type of industry pretty much independent of the "Economic freedom" metric of this report. Pharmas seem HQ'd in red states with various labs etc all over the place (red brown yellow blue and green). NEW low skill mfg seems to cluster in low wage states without respect to how this report colors them. High skill mfg seems to be all over the place, pretty much independent of the states' color. AGRIbusiness yes it does well in mostly green state central plains but it is highly lucrative in red state CA (and pretty much everywhere else too). anyone see any anecdotal trends WRT to this report? I don't.

Consider recent big company relocation, M&As etc. KMART buys Sears and moves from brown MI to red IL. Boeing moves from brown WA to RED IL. SBC's A of ATT is a RED to blue state move (I think) re ATT. I think, Exxon\Mobil merger kept things in blue state TX instead of heading for greener pastures.

IMO this report is weak. One would expect the WSJ to bring stronger game to the court than this stuff.
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Bob
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Post Number: 987
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Posted on Wednesday, May 17, 2006 - 1:17 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The answers to Michigan's problems are extremely complex, and there isn't one thing that is the root problem, but many causes. If it was one thing, someone would have figured it out and fixed it by now. Killing the single business tax is not the end all answer, and even businesses have said, although they hate it, it does not make the big difference that DeVos says it will. The bigger problem is where will the money comes from to replace what is lost when it is cut. Businesses hate taxes, any tax, so the less they have the better for them and their shareholders. But do you want to live in a state that has such low taxes that the quality of life suffers? That they cannot afford a great education system. There is a balence between taxes and quality of life, so we don't turn into a back water state that has people living in massive poverty like the south. At the same time we don't want taxes so high that no one wants to be here. In reading "The World Is Flat" the author talks about how the massive layoffs make the headlines, but not the businesses that are growing by adding 10 jobs here, 50 here, 100 here. They don't make the headlines like large numbers do, but they are the future. This is what is starting to happen in Michigan, be it slowly. This is where Granholm has it correct. There is only so much steel or cars and manufacturing jobs the world needs, and they will go to the place where they can do it the cheapest. But education/knowledge jobs are as infinite as the ideas that create them. Things like TechTown needs to be encouraged.
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Fnemecek
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Username: Fnemecek

Post Number: 1658
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Posted From: 69.215.246.97
Posted on Wednesday, May 17, 2006 - 2:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

No, clueless because you haven't moved beyond Econ 101.



Oh, wait! That one's so funny I'm gonna have to write it down.

BTW - since Karl wasn't interested in answering my question - would anyone else like to?

If the "economic freedom index" is a reliable indicator of job creation/retention, why are states that scored worse than Michigan outperforming us?

Also, why does job creation/retention vary widely across Michigan even when the tax rates & forumlas are standardised? (Take Detroit's higher taxes out of it completely. Heck, even take the Detroit area itself out of it completely and just look at the rest of Michigan).
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Jiminnm
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Post Number: 574
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Posted From: 68.35.85.184
Posted on Wednesday, May 17, 2006 - 2:11 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Rustic, I'm not inclined to buy the CD and check the actual data used, so I can't comment on how the ratings specifically came about (although a rating of 27.90 for MI and 28.37 for NM doesn't appear to be a significant difference). Since this was 2004 data, I would expect NM to be higher based on 2005 because our income tax rates were lowered in 2005 and the state is collecting significantly increased oil & gas royalties. We even received a small rebate from the state in 2005 because of these revenues. Also, our population is growing, slow but steady.

I'm pretty sure that there is much more to why Michigan appears to be missing out on the current economic prosperity than this study depicts. Michigan, and Detroit in particular, are not well perceived outside the state. This really became apparent when we moved to an area where folks have little actual knowledge of Michigan & Detroit. They're perceived as dangerous due to crime, costly due to high taxes and insurance rates, hard to do business in due to unions, and unpleasant due to bad weather. These perceptions have become so ingrained, due in large part to national media attention on only the bad things that happen, that they have become very difficult to change. It no longer matters whether the perceptions are true or untrue, they persist and affect personal and business decisions (ala the previous thread on materials used by other locales to woo the Chinese car maker). I think Michigan & Detroit are going to have to spend a lot of time, and money, changing these perceptions before there is significant economic improvement.

Oh Karl, the I-40 repairs you likely experienced are nearly done, but new I-40 construction is scheduled to begin on the other side of Abq thereafter. There's been so much road and other construction going on the past 2-3 years, that we have had bouts of cement shortages.
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Rustic
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Posted From: 130.132.177.245
Posted on Wednesday, May 17, 2006 - 2:38 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Jiminnm, ya don't needto buy the CD, read the exec summary including 1999 rankings. If you note most states bounced around very little either staying in the same decade or sliding up or down a decade to the nearest one on either side (note further that the middle three decades represent VERY little difference in absolute score, most of the spread is within the bottom decade). Seems that there were only 3 states that moved more than one decade in rank in 5 years: MS, OR, ME which went from (9,41,42 to 28,29,30 respectively from 99 to 04). I don't think it is reasonable to expect NM to significantly jump in the rankings WRT to MI in just a year based on this methodology, yet you claim SIGNIFICANT economic differences between MI and NM with NM having more favorable economic conditions. This report indicates this shouldn't be the case that they should be the same. Your personal experience seems to contradict what this report claims.

I completely agree that there is much more to why Michigan appears to be missing out on the current economic prosperity than this study depicts. (btw with global warming they are working on that weather problem slowly but surely , lol!)

(Message edited by rustic on May 17, 2006)
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Jiminnm
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Post Number: 575
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Posted From: 68.35.85.184
Posted on Wednesday, May 17, 2006 - 8:17 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Rustic, that weather issue would change things for certain, as you get warmer and we get even drier (driest winter and driest April on record here). Got any water to spare?
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Trainman
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Username: Trainman

Post Number: 21
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Posted From: 64.12.116.204
Posted on Wednesday, May 17, 2006 - 10:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I'm convinced its time to privatize SMART and DDOT by voting NO next August to defeat the DARTA agreement (SMART property tax, Wayne, Oakland and Macomb). The supporters of this agreement say that sales taxes for mass transit will bring in more jobs and federal grants. Its this kind of false propaganda that will likely win the mass transit vote next August. Please get this website well known or challenge it, if you can. http://savethefueltax.org
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Fnemecek
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Username: Fnemecek

Post Number: 1663
Registered: 12-2004
Posted From: 68.255.240.158
Posted on Thursday, May 18, 2006 - 10:47 am: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

The supporters of this agreement say that sales taxes for mass transit will bring in more jobs and federal grants. Its this kind of false propaganda that will likely win the mass transit vote next August.



Care to elaborate on that one, Trainman?
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Trainman
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Post Number: 39
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Posted From: 152.163.100.8
Posted on Sunday, May 28, 2006 - 7:12 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Those who want a state constitution change to allow county sales taxes are promising much lower property taxes.

Among them is the Transportation Riders United who wants to fund mass transit. If this group could lower the per-passenger costs AND protect revenue sharing AND other tax mechanisms AMD get direct industry support then
this change might work.

Unfortunately, for mass transit it won't work at this time.

See the facts about mass transit in southeast Michigan and what we can all do to help.

http://savethefueltax.org
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Fury13
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Username: Fury13

Post Number: 1088
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Posted From: 69.14.122.204
Posted on Sunday, May 28, 2006 - 8:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

That map was interesting. Notice how the green and blue states (said to offer the most "economic freedom") are, in general, states where no one really wants to live. Of course, Virginia, Colorado, New Hampshire, and South Carolina are exceptions. Nevada and Arizona are marginal. The rest... pfffft.
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Fury13
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Username: Fury13

Post Number: 1089
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Posted From: 69.14.122.204
Posted on Sunday, May 28, 2006 - 8:03 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Karl, did you start this topic because you think the topic of taxes is one of the top two or three issues facing Americans today?

It isn't.
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Karl
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Post Number: 2593
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Posted From: 68.230.22.99
Posted on Sunday, May 28, 2006 - 10:10 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Fury, like most of the threads on DY, they are started because they might be of interest to others.

I realize that AZ & NV, growing at the rate of 375 folks per day each, are "marginal" IYO. And where, IYO, do you feel folks "really want to live?"
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Pacypacy_
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Username: Pacypacy_

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Posted From: 24.192.166.67
Posted on Sunday, May 28, 2006 - 10:35 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I think people are voicing their preferences with their feet. With all the weather calamities the south and "sun" states have to worry about I think many young people are still opting to move there. I don't believe it's strictly because of the weather. When you start seeing hockey teams in CA and southern states....well they most likely didn't start out as NASCAR fans.
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Karl
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Post Number: 2594
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Posted on Sunday, May 28, 2006 - 11:04 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Other than wildfires (not severe until just a couple of years ago) AZ & NV have no natural disasters. The summer heat is the drawback, but is devoid of humidity & mosquitos. However, there are a few other critters........
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Goat
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Username: Goat

Post Number: 8497
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Posted on Monday, May 29, 2006 - 9:15 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Hmmm...Union militancy?
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Fnemecek
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Username: Fnemecek

Post Number: 1689
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Posted From: 69.212.51.175
Posted on Monday, May 29, 2006 - 11:39 am: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

That map was interesting. Notice how the green and blue states (said to offer the most "economic freedom") are, in general, states where no one really wants to live.



I wouldn't go so far as to say that no one wants to live there because there are literally millions of people who have chosen to live in those states.

However, the map does raise a series of other questions that no one around here has even attempted to answer.

If the "economic freedom index" is a reliable indicator of job creation/retention, why are states that scored worse than Michigan outperforming us?

Also, why does job creation/retention vary widely across Michigan even when the tax rates & forumlas are standardised?
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Jiminnm
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Username: Jiminnm

Post Number: 640
Registered: 02-2005
Posted From: 68.35.85.184
Posted on Monday, May 29, 2006 - 12:31 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

"That map was interesting. Notice how the green and blue states (said to offer the most "economic freedom") are, in general, states where no one really wants to live. Of course, Virginia, Colorado, New Hampshire, and South Carolina are exceptions. Nevada and Arizona are marginal. The rest... pfffft."

Fury, this is one of the dumbest things I've read in a while. No one wants to live in those states? Look at population growth numbers from the 1990 census to 2000 - Idaho +28%, Texas +23%, Oklahoma +10%, Nebraska +8%, Utah +38%, Wyoming +9%, Iowa +5%, North Dakota 0.5% (I will agree that few folks want to live in ND).

The population growth in Michigan for the same time period was +7%. BUT, the estimated change in Michigan from 2000-2005 is 0.2%.

Then there are your marginal states. From 1990-2000, Nevada population growth was +66%. Estimated growth from 2000-2005 is +20% (meaning that population has doubled since 1990, perhaps the largest growth in the US). From 1990-2000, Arizona population growth was +40%, with estimated pop growth from 2000-2005 at +18%. Even here in New Mexico, where we typically lag economic growth elsewhere in the US, 1990-2000 pop growth was +20%, with another estimated gain of +5% 2000-2005.

The US population is clearly moving westward.

"If the "economic freedom index" is a reliable indicator of job creation/retention, why are states that scored worse than Michigan outperforming us?"

Fnemecek, that's the tough question. I'll offer two possible answers that I've offerred before. First, Michigan, and particularly Detroit, are perceived poorly elsewhere in the US. Some of that is deserved, much is not. The national media does not hesitate to report every possible negative story about local industry (especially auto related), crime, etc. Yet, we never hear anything positive. Perception is very hard to change, even if the facts speak otherwise. It's going to take a major, and probably expensive effort, to change that perception. Until it's done, however, I think it will be very difficult for Michigan to attract new population and business (see the Chinese auto and Honda threads for how these perceptions are used by other communities to dissuade industry from moving to Michigan.

Second, I think the weather has a significant impact on personal choices to leave Detroit and the state. I love the sun and climate here in NM and can't imagine going back to live in a place where you have to battle the snow, ice, and cold, and go weeks without seeing the sun. Here, it's unusal to go a day without seeing the sun. When we get our 7-8 inches of snow per winter, it's gone by noon. BTW, the weather is another of those negative things that get national news media attention. This can't be changed, but I think much could be done to attract those who would enjoy the Michigan climate.
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Fury13
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Post Number: 1090
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Posted From: 69.222.11.226
Posted on Tuesday, May 30, 2006 - 12:47 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Jiminmn, most of those states are what I would call "bubba" states -- cultural wastelands.

Yeah, people move where the jobs are, though. If YOU had your choice between a good-paying job in the swelter and dust of West Texas and NO job in lush, picturesque upstate NY, where would YOU move?

Lots of economic growth and low cost of living in those sunbelt states. But, I'll say it again... cultural wastelands.

The places where people truly WANT to be are where the vibrant centers of population are: NY, San Fran, LA, Seattle, Portland, Boston, Chicago, DC, etc. But it's expensive to live in those places and often the jobs there don't pay enough (especially at entry or mid-level) to cover expenses and still have a decent lifestyle.

Stupid is as stupid does, Jim.
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Jiminnm
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Username: Jiminnm

Post Number: 648
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Posted From: 68.35.85.184
Posted on Tuesday, May 30, 2006 - 9:52 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Fury, you continue to spout nonsense and demonstrate your ignorance of a large part of this country. "Bubba" states? Cultural wastelands? It's that 'smarter than you' attitude and phony cultural snobbery that causes many tens of millions of folks in the west to simply write off the east coast and midwest. If yours is the predominant view, there's no wonder why Detroit and Michigan flounder.

I wouldn't move to upstate NY (or anywhere else in NY) for any job. In fact, of the cities you listed, Seattle is the only one that would have any interest for me, but I don't like its dreariness. When we moved here from Detroit, it was purposefully to get away from a large city and get some space around us. It could be cheaper elsewhere than here for all I know, but it doesn't matter. I'll take the mountains, the sun, the wilderness, the hiking, the skiing on real mountains, and the Native American culture. And yes, we also have symphonies, museums, universities, galleries, great book stores, more art than Michigan or most other places (Santa Fe is the 3rd largest art market in the US), etc. There was a thriving culture here 800 years ago, 400 years ago, and it all continues today.

In the end, some folks may chase jobs to any location. But many, many folks came here because of the place (and other places out west) and then figured out to make it work for them. I expect that a huge number of folks in the middle and west side of the US would have little interest in moving to any of the places you listed. In fact, we've met dozens of people who moved here from those places and have no interest in going back. They are where they (and we) WANT to be. If you want to be stacked up in a city, surrounded by concrete and other people, go for it. But don't think that's the only way to live or that it's even a better way to live.
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Fury13
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Post Number: 1092
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Posted From: 69.14.122.204
Posted on Wednesday, May 31, 2006 - 7:43 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Jim, I assume you're in New Mexico and wasn't really referring to that particular state. I'm aware of the kinds of things that NM has to offer, especially in and around Santa Fe (but what about the state's "legacy" of atomic research/testing and the abject poverty and rampant alcoholism among much of the state's Indian population? Hmm.). Plus, on the map shown, NM is ranked in the same category (in terms of "economic freedom") as Michigan. So, is NM really a low-tax state?

I am also aware that some people (including myself, actually) desire a lifestyle that's more rural or, say, nature-oriented. But this is a message board that celebrates urban living and culture; specifically, living and culture in Detroit.

You deride being "surrounded by concrete." Yet, essentially, that's what most of the folks on this board want. They want a downtown loft, apartment, or brownstone; or a single-family home on a small city lot in a classic, walkable neighborhood.

Snobbery? Maybe. The fact is that low-tax states typically offer less in terms of services, transit, and culture (I'm not saying it's like that in every low-tax state... but it is in most of them). I don't see much culture or sophistication in places like South Dakota, Texas (lived there for eight years... extreme Texan arrogance and myopia), Iowa (lived there for six... corn fields and cows), Nevada (again, there for six years... scenery is great but the gambling industry controls the state), Oklahoma (I have relatives there, so I have visited... it's a bland wasteland), or Nebraska. Oh, I'm sure there is an Omaha Symphony and maybe a Bismarck Ballet and possibly an Amarillo Modern Art Museum (!?) and other such instutions/attractions, but how good are they? At what level do they operate? Can they compete with a NY Metropolitan Opera or a Chicago Symphony or a San Diego Zoo?

(Message edited by Fury13 on May 31, 2006)
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Karl
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Post Number: 2612
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Posted on Wednesday, May 31, 2006 - 9:59 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Perhaps to bring this to a more contemporary focus, Fury's points on culture in large cities are valid - but the history of much (all) of that culture began with private enterprise (DIA/Ford comes to mind)

The future appears to be where taxes are lower, attracting business to those places. Like art museums, zoos, symphonies, theatres of all sorts, etc came to Detroit (most didn't exist a scant 100 years ago) they will follow to places where folks live in large #'s, once again begun and funded by individuals and corporations - not government.
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Fury13
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Username: Fury13

Post Number: 1094
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Posted From: 69.222.11.226
Posted on Wednesday, May 31, 2006 - 10:46 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

So, Karl, that means that we can expect a great symphony orchestra, a world-class opera company, and irreplaceable museum collections to show up in Podunkville, Wyoming, sometime around 2089.

We'll all be dead.
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Karl
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Username: Karl

Post Number: 2618
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Posted on Wednesday, May 31, 2006 - 11:47 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Well, one can choose: Sit back and enjoy the efforts of others long dead, or improve a new place for others who don't have such things. We all know that "Rome wasn't built in a day" and neither will Albequerque, Phoenix or San Antonio. But Jiminnm and others are enjoying the natural culture of new places, and adding to the man-made culture in those areas.

All places have something to offer everywhere around the world. The variety offered just within the borders of this great country is breathtaking. Perhaps if I took you rim-to-rim-to-rim of the Grand Canyon, 52 miles of some of the most breathtaking culture/scenery in the world, neither of us would notice that there isn't ballet/symphony (yet) in Grand Canyon Village. I love and support the culture in the big cities - but choose not to be stuck there following in the footsteps of recent forefathers. Folks can replicate things if they want. Natural environments are a bit tougher.

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