Oops! Fact that matters overlooked by ALEC
Chuck Sheketoff
As Jon Shure of the Center on Budget and Policy Priorities notes in a recent blog post, a new American Legislative Exchange Council (ALEC) report (PDF) points to tax systems of Hawaii and Alaska as the reasons why Hawaii has lost more residents over the last two decades than Alaska has. Hawaii enjoys a healthy income tax while Alaska has no income tax.
ALEC brings up this example to attack state efforts to raise revenues for vital public services by asking the wealthy to contribute more and to promote repeal of (typically progressive) state income taxes. ALEC paints a picture of fleeing Hawaiians and half as many fleeing Alaskans in support of its efforts to repeal states' income taxes.
When comparing these two states and the degree to which people move to and from them, ALEC, not surprisingly, ignores factors other than taxes that influence a family's decision to move, such as differences in the job markets, energy prices, housing costs, and the like.
ALEC’s been having problems these days. Add to that the problem that in this latest report report ALEC neglected to look at migration between Alaska and Hawaii. As Shure notes,
slightly more households are moving from no-income-tax Alaska to high-income-tax Hawaii than the other way around. In 2010, the last year for which data are available, 300 households moved from Alaska to Hawaii; 287 moved the other way.
Shure is surely right that the omission of that fact is further proof that ALEC’s analysis is without merit.
Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.
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3:11 p.m.
Apr 18, '12
Socialist Alaska pays its citizens just to live there, no state tax at all. Not to mention the stat. supported ferries, health care, and trains, and the constant stream of federal money courtesy of earmarks. Those Repubs love their socialism! That said, having spent time in Anchorage, Fairbanks, and Juneau in winter, anyplace that has sunshine and warmth looks damn good. Many, many Alaskans take their vacation in winter, to Hawaii. Not surprising they would move their permanently.
8:03 p.m.
Apr 18, '12
They seem to be error/b.s. prone on multiple fronts today. More here: ALEC Sends Out an SOS to Breitbart Bloggers
9:14 a.m.
Apr 20, '12
I don't want to seem like a right wing apologist here but Shure has his states backwards. The IRS data shows 300 tax returns moving from Hawaii to Alaska and 287 the other way. More money as AGI did go from Alaska to Hawaii, though.
Here it is:
State_Code_Dest,State_Code_Origin,Return_Num,Exmpt_Num,Aggr_AGI
02,15,300,646,10697
15,02,287,607,13517
02 is Alaska, 15 is Hawaii - alphabetical.
In fact, migration between states in the IRS tax data correlates positively with ALEC's ranking. It's weak, but it's there. I looked at a pairwise ranking of states based on net migration and also a ranking by inward migration as a percentage of total migration. Total net migration of course is mostly a function of total population.
D.C. and Louisiana tie for first place in the pairwise ranking, by the way. ALEC didn't rank DC but I gave them the bottom slot -- didn't seem unreasonable. Alaska is at #8, Hawaii at #25.
10:30 a.m.
Apr 21, '12
A more balanced and nuanced column on the same topic:
http://online.wsj.com/article/SB10001424052702304432704577349860656569348.html
(I forgot how to insert a link)