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Statistics show to boost Louisiana's population, cut taxes

As more dismal statistics come out demonstrating Louisiana’s lack of allure for living in it, reflected by relative population changes of the state versus others, let us digest upon the following remark:

Elliott Stonecipher, a political pollster and demographer based in Shreveport … said state officials should be trying to find out why people are leaving the state, and they should reshape state economic and taxation policies both to reduce out-migration and to entice people to move in.

As I have argued, (and so have C.B. Forgotston, Moon Griffon, and still others), Stonecipher’s conjecture that tax policy has consequences rings quite true. Given census data and that from the Tax Foundation, this is not difficult to test.

I corralled three sets of data for each of the states plus the District of Columbia: total state tax burden (including local taxes) in 2005 (in percent, which for most states has changed little over the past few years, Louisiana being an exception), net migration for 2000-2004 (in percent increase), and total population change from 2000-04 (in percent increase). Then I computed two relationships, between 2005 tax rate and population change, and between the rate and net migration. The theory here is that higher tax burdens on residents encourages them to leave and discourages others from coming, which also gets reflected in population changes.

For readers into statistics, here’s what I got: for population change, the Pearson product-moment correlation is -0.22, and for migration it is -0.30 (note: we are looking at the entire population of 51 jurisdictions so significance tests are superfluous). For readers not into statistical analysis, what this means is tax rates are moderately correlated to population and migration; as these rates increase, the rate of population increase and rate of in-migration increase go down.

Ranking 16th in tax burden (10.3%), 44th in population change (+1.05%), and 43rd in in-migration (-1.66%), one can see why Louisiana is where it is on these numbers. Stonecipher has a plea in this regard: “I can't prove that's what's happening. But the state should be doing research to see if that's true. There's an elephant in the room, and nobody wants to acknowledge it.”

Well, I just showed something was there. The state can start its research if it likes, but much better to solve the problem would be some tax cutting at the first opportunity. Gov. Kathleen Blanco seems bent on a special session for teacher pay raises in January; instead, she needs to make it one dedicated to lowering taxes.

1 comment:

Anonymous said...

Even our state government should be able to figure it out. People are leaving means fewer to pay the taxes. Fewer to pay the tax means less state revenue until they raise the tax rates for those who stay. My fear is based on having to pay more tax. I have given up on paying less.

Blanco like those before her just don't get it. Their only interest is to grow government. People leaving the state will mean higher tax rates.

Jimmy Couvillion