Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

State Taxes and Debt

by October 17, 2023
October 17, 2023
State Taxes and Debt

Chris Edwards

Government legislators pursue spending increases because they believe that spending solves problems in society and benefits their constituents. However, they use methods of fiscal illusion to try to hide the costs of spending. One method is debt. By borrowing, legislators push the costs down the road for future legislators and taxpayers to deal with.

Spendthrift legislators can get away with borrowing more and taxing less in the short run, but in the long run taxes will rise to cover the higher interest costs on the accumulating debt. Relative to state gross domestic product, state and local taxes tend to be higher in states that have higher state and local debt, as shown in the chart below. The tax and debt data are from the Census Bureau for 2021.

The chart includes a fitted regression line showing the strong positive correlation between taxes and debt. Perhaps states that borrow more end up raising taxes to cover the rising interest costs. Or perhaps states that favor higher spending tend to pursue it with both taxes and debt. There are some outliers—Kentucky has high debt and average taxes, whereas Maine and Vermont have high taxes and average debt.

People living in the top‐​right states should be asking questions. Residents of Vermont, Maine, and Hawaii should be asking why their tax burdens are almost twice as high as the burdens in the lowest‐​tax states. And residents of Kentucky, West Virginia, New York, and Hawaii should be asking why their states have racked up debt burdens three or four times higher than the burdens in the lowest‐​debt states. And all of us should be asking why the federal government is vastly more irresponsible with debt than the worst‐​run states.

0
FacebookTwitterGoogle +Pinterest
previous post
Governments Infringe on Women’s Right to Decide Where to Have Their Baby
next post
Not Just Any Fiscal Commission Will Resolve America’s Fiscal Crisis

You may also like

Borrowing Rates Much Less Correlated with Fed’s Policy...

October 24, 2024

The Islamic Moses in the Times of Israel

March 21, 2025

Brasilia-Washington Tech Policy Connections

November 5, 2024

Try Cato’s New Immigration Game: Find Your Path...

August 8, 2023

Election Policy Roundup

March 3, 2025

Friday Feature: Steps Learning Center

June 21, 2024

Youth Online Safety Bills and the First Amendment:...

October 26, 2023

Cato’s new Globalization Quiz Tests Your Knowledge (and...

September 26, 2023

The First Step Act Applies to Resentenced Defendants

May 6, 2024

UAW: Trump/Musk Exchange on Strikes Violated Federal Law

August 14, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Hunter Biden seen driving Toyota rental in South Africa after his Secret Service detail was terminated

      May 31, 2025
    • Trump tariff plan faces uncertain future as court battles intensify

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Musk confident DOGE will save $1 trillion as government cost cutting continues

      May 30, 2025
    • Who will be Elon’s successor? The top names in line for DOGE chief

      May 30, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025

    Categories

    • Business (8,104)
    • Investing (2,000)
    • Politics (15,446)
    • Stocks (3,118)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved