Some politicians lie (Maryland edition)

That’s just my opinion.

Meanwhile, Maryland Governor Larry Hogan is responding to the tax shortfall in his (our) state with a plan to cut taxes. And his justification, repeated during the campaign, and now during his State of the State message, includes these two claims:

“We’ve had the largest mass exodus of taxpayers fleeing our state – of any state in our region, and one of the worst in the nation.”

“Businesses, jobs and taxpayers have been fleeing our state at an alarming rate.”

As a dedicated public servant — who just got furloughed, lost a cost of living pay increase, and lost a merit pay increase, while our students are getting a tuition increase because of the state’s disastrous tax shortfall — I remain doggedly committed to pursuing truth.

So, the “mass exodus of taxpayers” fleeing our state:

Book1

Yes, population growth was a little slower than the regional and national averages for a couple years there. But the 25+ population has grown every year but one since 2001. Checking my definition of “exodus” now…

And the “jobs … fleeing our state at an alarming rate”:

Book1Job growth faster than the national average, no (net) “fleeing.”

The source for both figures is my calculations from the American Community Survey via IPUMS.org.

Addendum: The Bureau of Labor Statistics reports Maryland employment trends here. Here is the employment trend from 2004:

IMG_2349

10 thoughts on “Some politicians lie (Maryland edition)

    1. First, no one deserves to lose earned income based on their merit. For that I am truly sorry.

      With that said, I don’t think Census data is sufficient to fully understand this policy issue. Maryland’s Comptroller has two problems. First, he needs to find rich folk in his state to tax. Second, he needs to find them and get them to pay their taxes

      The latter of these two questions is far more important in many ways. Let us assume that rich people have not left Maryland (based on your numbers, we don’t know if Maryland’s population growth was due to low- or high-income people moving to the state).

      If we assume that high-income people have moved and/or stayed in Maryland, then we have to ask: how many of these rich folk are using tax avoidance schemes? That becomes particularly troubling, from the perspective of the Comptroller, because finding and prosecuting those who participate in these schemes is very costly.

      There is some evidence that lowering the marginal tax rates on high-income earners does reduce the incentives for them to use tax avoidance schemes (e.g. see Feenberg and Poterba 1993.. they used Treasury data, which is more informative for this issue than Census surveys).

      I suspect that Larry Hogan’s economic advisers are looking to reduce the incentives for high-income earners to use tax avoidance schemes. Why? Because the state lacks sufficient resources to investigate and charge them in court.

      It is unfortunate that hard-working and productive faculty like yourself are bearing the brunt of this policy change. I do think such a change will result in higher revenues for the Comptroller, however.

      Liked by 1 person

  1. Actually, the point that Larry Hogan made is clearly demonstrated by the graphs; From 2000 to 2014, the employment growth is similar between both MD and Va; the job growth in DC is low until 2008 when Government became the largest provider of job growth. However, the corresponding population growth in MD is less than DC and Virginia, and is almost comparable to US as a whole, which the MD outstrips in growth. The only conclusion is some of those employed in Md are increasingly coming from DC and VA, and there has been an outflow of people from Md to DC, to take up jobs there, or work in MD.

    He may be wrong on the cause, but right on the outcome. You can demonstrate his point by normalizing the job growth by population growth; the ratio is close to 1 in MD; it should be less than 1 to include children.

    Liked by 1 person

      1. Today, Washington Post editorial also tore into Larry Hogan for attempting to cut 700 Million out of a perceived 1200 million shortfall. While these cuts are not “Jindalistic”, I anticipate both, the actual shortfall, and the cuts to be much more if gas price stays at 2.09 $. The governor is just setting the room up for budget cuts (I am not arguing that he is right or wrong).

        Liked by 1 person

      1. Furlough is done of necessity, but if you’re one of the furloughed… ugh. That happened to me in AZ, Office for Children with Special Health Care Needs. One day turned into two, same workload though. Then … fini for the entire program. You have my sympathy and best wishes.

        Like

  2. First, no one deserves to lose earned income based on their merit. For that I am truly sorry.

    With that said, I don’t think Census data is sufficient to fully understand this policy issue. Maryland’s Comptroller has two problems. First, he needs to find rich folk in his state to tax. Second, he needs to find them and get them to pay their taxes

    The latter of these two questions is far more important in many ways. Let us assume that rich people have not left Maryland (based on your numbers, we don’t know if Maryland’s population growth was due to low- or high-income people moving to the state).

    If we assume that high-income people have moved and/or stayed in Maryland, then we have to ask: how many of these rich folk are using tax avoidance schemes? That becomes particularly troubling, from the perspective of the Comptroller, because finding and prosecuting those who participate in these schemes is very costly.

    There is some evidence that lowering the marginal tax rates on high-income earners does reduce the incentives for them to use tax avoidance schemes (e.g. see Feenberg and Poterba 1993.. they used Treasury data, which is more informative for this issue than Census surveys).

    I suspect that Larry Hogan’s economic advisers are looking to reduce the incentives for high-income earners to use tax avoidance schemes. Why? Because the state lacks sufficient resources to investigate and charge them in court.

    It is unfortunate that hard-working and productive faculty like yourself are bearing the brunt of this policy change. I do think such a change will result in higher revenues for the Comptroller, however.

    Like

  3. Sometimes it’s good to take things literally. A lie is a lie. Obviously Governor Hogan framed his premise with some lies in order to come out with his predetermined conclusions. Having established this, we should move on to what good or harm his proposed policies will do. Cutting back on education and proposing to reverse the inflation-linked gas tax stops us from building the infrastructure on which continued and expanded growth of the Maryland economy depend.

    Like

Comments welcome (may be moderated)