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What is holding Mississippi back are things a lot of people refuse to believe.
1. There is no talent here. Talent does not come here and the talent that Mississippi produces, leaves. You cant build or attract business without people to work and run them.
2. In comparison and in peoples perception, Mississippi sucks. No one wants to come here. Sure, some of their reasons are based on perceptions that may not be correct.....but a lot of the ways people feel about this place are a measure of true.
I am one of the talented people who left. I left because my wife at the time (electrical engineer) could not find a job in Mississippi.
I would love to return to Mississippi, and I actually have a standing job offer with my first employer out of college. My very large extended family is there, as is my wife's. I have land I could build my dream house on overlooking a 10-acre pond. But I refuse to return because I have school-age children and Mississippi's education system is abysmal.
I got lucky with my education. I was in a poor rural 1A school (28 people in my senior class), but I had access to a progressive principal, a school board willing to take chances, a couple of amazingly awesome teachers, and parents who weren't so blinded by racism that they left me in the public school instead of putting me in an all-white "Christian" school. Because of experimental programs, I was able to learn physics, calculus, astronomy, and computer programming at a time when the standard education was basic algebra. I had 9 hours of college credit before I had my high school diploma.
Unfortunately, not long after I graduated the principal retired and was replaced by the football coach. The coach's son became the next superintendent of education. The sports programs excelled for a while, then everything came crashing down. The school dropped to the lowest 10% in the state. Eventually it closed, consolidating with the other county school.
All peoples have the potential to produce talent. Even the child of the laziest welfare queen in the state has the potential to be the next Bill Gates. But the potential will never be realized if the talent is never exposed to the education needed to grow.
My understanding is that those graphs on supply side economics don't reflect the actual advances in jobs and opportunity that occurred from 1982 to 2000. If you look at per capita income by race and ethnicity, for example, it shows that all groups increased (around 50% during that short 18-year period) and I believe African-Americans had the greatest increase in income during this era.
One problem with that particular graph (top 1% or top 10% etc) is it implies that those data represent the same group of people year end and year out. But (from what I've read) that is far from the case. In reality, the people in those high brackets are constantly changing, as people's fortunes rise and fall from one year to the next.
There is also the age factor. Younger adults by definition shouldn't make much more income now than say 50 years ago, because people in their 20s and 30s are lacking in experience and skills typically, and for that reason most people don't develop the experience and skills to command their highest salaries until they get into their late 40s and 50s. So the really big income-increases are most reflected among people who have been in the work force for 30-plus years, etc.
There are other factors such as prices. Everyone knows that new products such as VCRs or cell phones start out at a high price and over time the prices go further and further down. For that reason, most people today can go to Sams or Wal Mart and fill up on everything from iPads to cell phones to clothes made in China. These days virtually everyone goes out to eat on a regular basis. That's because prices are so much lower, with so many more goods and services than were available to average Americans just a few decades ago.
Fewer people today are married, which conversely allows more people to have their own place, which increases freedom and independence but also drives up costs. So that's just another factor that impacts data that show up in graphs, etc.
One point though you made was on the money regarding the current federal policies (which are the very opposite of supply side economics) that indeed are delivering growth mainly in the stock market, which helps only those who can afford to own stocks and those with 401k through their employer.
From what I've read, when the federal government is out of control on spending, it also means they are out of control on borrowing money. And in order to minimize the cost to borrow all that money, the president starts printing money and making interest rates so low that the government is effectively paying people to take out a loan. All that cheap money serves as an enabler to Congress, which spends out of control. And all that government borrowing shifts money that otherwise would have been invested in the private sector, but is instead loaned out to the federal government. And when the investing is on the government side rather than the private sector, it means productivity and growth are going to horrible with few new good jobs created. And the winners from those policies are those in the stock market, and the losers are people looking for jobs...just as we are seeing playing out in today's economy.
The Tax Foundation and ALEC (American Legislative Exchange Council) rank the states annually based on their tax rates and other government functions that impact economic investment incentives and barriers.
In recent years Mississippi has usually been ranking roughly 13th to 17th, somewhere in that range. There are roughly 8 or so states with no individual income tax, including Texas and Florida which are probably the two most popular states for businesses to expand these days. So Mississippi does have room for improvement in terms of lowering income tax rates to improve incentives for investors.
In recent years Mississippi's GDP annual growth rate has mirrored the national average. From 2002 to 2012, Mississippi's economy grew 46% and Mississippi ranked 30th in cumulative GDP growth (source is ALEC website). Presumably state tax revenues rise annually at a similar rate to annual economic growth. I found tables that show annual government tax revenues by state (US Census annual survey) but what I found was not in inflation-adjusted dollars, so it was hard to figure an annual average percentage increase in state tax revenues. I'm guessing though 3 or 4%, since Mississippi's economy grew by 46% over 10 years from 2002 to 2012.
I believe the Mississippi legislature's current proposed plan is to phase in cuts to the individual income tax over 15 years, which means the revenue cuts would be offset by the annual increase in overall tax revenues due to normal economic growth. Furthermore, as Reagan demonstrated, lower income tax rates open up new business investments that were previously sitting on the shelf due to profit projections being outweighed by risk of failure. As tax rates drop, the rewards begin to further outweigh the risks, which means more businesses choose to expand and thus we get a faster growing economy.
In other words, income tax cuts trigger more business expansions which causes more profits to be made which means, in the end, more money goes to the government than ever before, even if actual tax rates are lower.
One last thing...I would be surprised if investors would jump on new investments (due to tax cuts) presently while under the current federal administration. However, after the 2016 election depending on the outcome, I would guess that state income tax cuts would indeed trigger robust increases in investments in the state, which in turn would increase overall state government tax revenue collections, even though the actual tax rates are lower.
This was the genius of Reagan...i.e. cutting rates from around 70% to 28% which triggered a huge economic boom of the 80s, and overall tax revenues to the federal government were ultimately higher than ever.
Which lasted what? 3-4 years before a crash in '87 then a sputtering economy until a recession in '91? How do you account for the growth that occurred between 1994-1999 when the tax rate was increased? The idea you're talking about is fantasy land. Tax cuts, on their own, do not cause economic growth to occur.
There was once a time when Republicans were sane about this. There was once a time they opposed tax cuts on the grounds that they were fiscally irresponsible without corresponding spending cuts, and they knew the spending cuts would not happen because of the cold war.
At the federal level, there are only 3 items where you can cut spending and it would make an impact - medicare/medicaid, defense, unemployment/social security, in that order, and those are 3 things that politicians are loathe to cut, because people don't like it. Any one of those 3 you cut not only result in direct job cuts but also considerable numbers of indirect jobs. We can cut PBS or National Endowment for the Arts down to zero, but all those discretionary cuts do is like taking 1 piece of pepperoni off of the pizza before eating the whole pie.
At the state level, there are similarly only a handful of items to cut that would make a difference: medicaid, education, agriculture & economic development, roads. Education is the plurality largest expense. Again, cuts to those are not popular because they all have jobs tied to them and jobs tied to those jobs.
When politicians are willing to say, "We're going to eliminate the income tax -15% of our revenue and we're going to cut 15% of everything the gov't does to compensate" THEN I'll believe it's a fiscally sustainable path. Cuts that deep would have consequences like some schools would close. Not trim their budgets, I mean close down & consolidate districts. That means some towns would lose what are probably one of their largest employers. I know in my town, the school district is a top 5 employer. What kind of multiplier effects would that have?
When politicians have that kind of courage, then I'll be impressed. Cutting taxes but not spending is like saying you're going to lose weight, so you drink a diet coke when you eat your whole pizza.
Otherwise, I'd prefer that governments pay their bills.
You raise a great question about the 90s and how Reagan's era of huge growth continued under Bill Clinton. I actually found an article once (Heritage Foundation website) that explained things in a clean, simple way that I was able to retain.
In President Bush 41's final quarter of his presidency (which would be fall 1992, I think), the economy had already started a massive boom and was growing at something like 3.5-4% growth. The economy had undergone a very light recession triggered apparently by the Savings and Loan crisis, for which the federal government had to do a massive bail out. Once that crisis was resolved, the economy has resumed its bustling expansion started after Reagan's huge tax cuts in 1982 and especially 1984. (I'm going on memory, so by all means anyone feel free to correct me...of course...).
Anyway, on the day Clinton started his presidency with the economy booming as noted above. And yes redguard labels, Clinton raised income tax rates from something like 28% to around 35% (going on memory...now with Obamacare the effective top rate is around 42%). After Clinton's rate increase, yes the economy indeed slowed down, but the slow-down wasn't so noticeable since it was starting from such a high place (3.5 to 4% if memory serves during Bush 41's final 3 months in office).
Then, the Republican Revolution under Newt Gingrich happened. And Bill Clinton made a huge change. In order to remain popular in light of the election that put Gingrich and the Republicans in charge of the House for the first time in decades, Clinton responded enacting Gingrich's Republican policies and taking credit for the resulting massive economic boom.
Those new policies by Clinton and Gingrich were: Huge tax cut, reducing the capital gains tax rate by about 30% (i.e. tax on profit made from selling stocks essentially) from 28% to I believe 20%. This obviously offset Clinton's previous income tax rate increases. Next, Clinton and Gingrich passed NAFTA, which was the elimination of the taxes on imports and exports between the US and Mexico and Canada. Third, Clinton agreed to Gingrich's push for welfare reform, which resulted in a massive number of people who previously sat at home to enter the work force, again resulting in a huge increase in overall productivity by Americans on a day to day basis.
So in summary, Reagan tax cuts resulted in a massive economic boom in the 80s. Under Bush 41 a rescue of the savings and loan collapse caused a very light recession and by the the last 3 months of Bush 41's presidency the economy had recovered and was again booming. Clinton enacted income tax cuts which temporarily slowed the economic boom somewhat, but under Newt Gingrich, Clinton offset his tax increase with other major tax cuts (capital gains, taxes on exports/imports) and incentives to increase working (welfare reform).
In the final days of the Clinton presidency the stock market collapsed, as the internet bubble that occurred around 2000, burst. Then of course we know the rest....a few months later was 9-11, beginning an era which we are still right in the middle of.
You raise a great question about the 90s and how Reagan's era of huge growth continued under Bill Clinton. I actually found an article once (Heritage Foundation website) that explained things in a clean, simple way that I was able to retain.
In President Bush 41's final quarter of his presidency (which would be fall 1992, I think), the economy had already started a massive boom and was growing at something like 3.5-4% growth. The economy had undergone a very light recession triggered apparently by the Savings and Loan crisis, for which the federal government had to do a massive bail out. Once that crisis was resolved, the economy has resumed its bustling expansion started after Reagan's huge tax cuts in 1982 and especially 1984. (I'm going on memory, so by all means anyone feel free to correct me...of course...).
Anyway, on the day Clinton started his presidency with the economy booming as noted above. And yes redguard labels, Clinton raised income tax rates from something like 28% to around 35% (going on memory...now with Obamacare the effective top rate is around 42%). After Clinton's rate increase, yes the economy indeed slowed down, but the slow-down wasn't so noticeable since it was starting from such a high place (3.5 to 4% if memory serves during Bush 41's final 3 months in office).
Then, the Republican Revolution under Newt Gingrich happened. And Bill Clinton made a huge change. In order to remain popular in light of the election that put Gingrich and the Republicans in charge of the House for the first time in decades, Clinton responded enacting Gingrich's Republican policies and taking credit for the resulting massive economic boom.
Those new policies by Clinton and Gingrich were: Huge tax cut, reducing the capital gains tax rate by about 30% (i.e. tax on profit made from selling stocks essentially) from 28% to I believe 20%. This obviously offset Clinton's previous income tax rate increases. Next, Clinton and Gingrich passed NAFTA, which was the elimination of the taxes on imports and exports between the US and Mexico and Canada. Third, Clinton agreed to Gingrich's push for welfare reform, which resulted in a massive number of people who previously sat at home to enter the work force, again resulting in a huge increase in overall productivity by Americans on a day to day basis.
So in summary, Reagan tax cuts resulted in a massive economic boom in the 80s. Under Bush 41 a rescue of the savings and loan collapse caused a very light recession and by the the last 3 months of Bush 41's presidency the economy had recovered and was again booming. Clinton enacted income tax cuts which temporarily slowed the economic boom somewhat, but under Newt Gingrich, Clinton offset his tax increase with other major tax cuts (capital gains, taxes on exports/imports) and incentives to increase working (welfare reform).
In the final days of the Clinton presidency the stock market collapsed, as the internet bubble that occurred around 2000, burst. Then of course we know the rest....a few months later was 9-11, beginning an era which we are still right in the middle of.
Yes let's use a partisan website to make your point.
Sammy, I think you are referring to Heritage Foundation website as being partisan. I hear you, and that's why I listed the reference, so that anyone could take a look and refute their data if they would like.
That said, I think I retained the main points from that article, because they are so logical (Reagan lowers tax rates from 70% to 28%; Clinton raised rates somewhat, I think maybe to 35%; then Clinton/Gingrich then offset income tax increase with lower tax rates on capital gains and taxes on imports and exports to Mexico..plus welfare reform....And...Voila...per capita income for all Americans (i.e. races and ethnicities) increases by 50% in 18 years.
If the Republicans win the presidency and retain the House and Senate, they'll still won't have the 60 Republican senate votes needed to pass tax cuts because Democrats will filibuster, which can only be bypassed with 60 votes (unless Republicans go nuclear and eliminate the filibuster which maybe they should...).
But anyway, what I was thinking was...if the Republicans have say 55 votes for tax cuts and need 5 Democrats to vote also for tax cuts...There must be "something" that those 5 Democrats need in their home districts, they could sway them to vote with the Republicans.
I would think the massive Reagan-esque prosperity resulting from tax cuts would be so enormous that the impending tax revenue growth would justify almost any amount of spending to effectively buy off 5 Democrat votes, one would think. I mean, how many new bridges and college academic buildings and stadiums, etc, for their home districts would it take to get just 5 Democrat votes in the Senate for major federal income tax rate cuts in 2016, at the very least back to Reagan-era tax rates that delivered a 50% increase in per income for all races and ethnicities in just 18 years.
The exciting thing is that the Mississippi legislature must be wrangling with these very issues literally as we speak. Not in the future. Literally today as we speak. If they follow Speaker Gunn's plan to eliminate the income tax phased in over 15 years, Mississippi will be in an elite group along with Florida, Texas, and Tennessee (think Miami, Austin, and Nashville) as one of the great places in the world to do business, at least from the standpoint of local taxes and regulations.
Just the influx of people moving from Memphis across the line into DeSoto County, Marshall County and Tate County in North Mississippi after the tax cuts would deliver nearly more growth to Mississippi than all the growth for the entire state in a normal year. The brand-new I-269 is opening this year, the government schools in DeSoto are top of the line, these cities in DeSoto are fairly well planned and managed, and the only thing stopping this area is the huge difference in taxes between Tennessee and Mississippi.
The difference in taxed is minor for regular middle class households because Memphis' property and sales taxes offset Mississippi's higher income taxes. But for wealthy households who live in nice but regular-sized homes, the income tax hit in Mississippi versus Tennessee is enormous, and no amount of savings from Mississippi's lower property and sales taxes can justify a move south across the state line. If you're a doctor or own a small company, and your household income for example is $300k or say $500k, in Mississippi your income taxes are $15-$30k versus literally $0k in Tennessee. That means moving to MS increases your state taxes up to $30k, and there is no way you can offset that with reductions in property and sales taxes. (thus, presently those rich households often are staying in Tennessee)
No one in their right mind in that situation is going to move south across the state line and pay that extra $15-30k in income taxes. However...once Mississippi eliminates the income tax, there will be a big move of both middle class and wealthy households south from Memphis into Mississippi.
DeSoto County and neighboring Marshall and Tate counties....are a very pretty region with lots of nice land...literally perfect for someone to buy themselves a 5 or 10 acre spread and live the good life. The land is rolling with a nice mix of woodlands and green pastures. It's very safe, great climate and pretty good location. Once Mississippi eliminates the income tax, that area will skyrocket. And I think probably the Mississippi Coast and Pearl River County outside New Orleans...plus George County outside Mobile...all of these will skyrocket. Exciting times!
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First, the taxation matter.
Replacing the income tax with a sales tax simply shifts the burden on people who are least able to afford it - unless you can show me that the state's doctors and lawyers spend 95% of their total after tax income on consumer items. I'm not holding my breath, though.
Here's an idea: raise income taxes on those making more than $150,000/yr/individual, or $300,000/yr/household. Certainly it should be raised on those individuals and households earning more than $500,000. It's not like they're going to be in serious pain for having to pay more in taxes (especially since the wealthier have gotten even wealthier over the past 30 or so years).
Closing loopholes in the state's tax code for businesses netting more than $500,000 per employee would also help.
Quote:
Originally Posted by Neshomamench
You and I are not going to change each others minds. I am perfectly fine with cutting and then cutting some more....and then cutting again.
If you dont work, you dont eat.
If you want an education, you can get one is a cheap building you can help clean. Not the palaces we keep building for kids to go to school in. I dont have a problem with government run public education. The current system is broken. Throwing more money at it wont fix it, it will just make it more expensive.
Government and government "departments" are often the best solution. Shut down as many as you can and gut most of what is remaining.
For the most part, I dont want government solving problems. I want industry to solve problems and the government to be the arbitrator of the marketplace and the light hand of regulation.
I fully understand you see it differently.
BTW, dont cast me into a political box over a single issue. It is very myopic of you.
Am I to take it Madison Central H.S. should come under the wrecking ball and be replaced with pre-owned trailer homes? Or even circus tents? Port-a-potties for bathrooms? Hey, that's gotta be cheaper than maintaining MCHS's facilities (electric bills + janitorial and maintainence costs).
Last edited by Phil75230; 03-06-2015 at 05:08 PM..
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