An interesting column in Barron’s spotlighted a problem which should concern all Vermonters. States with high taxes are experiencing an exodus of citizens, a significant number of whom are “…productive and wealthy people who don’t believe the services associated with high taxes are substantial enough to offset their burdens.” Sound like Vermont? Our state was one of a dozen states “to raise income taxes and, what’s more, to bump up gas, sales or estate taxes.”
California has been hard hit over the past decade, with a net loss of 1,378,706 people! They left individually, or sometimes collectively, as businesses moved to Nevada, Arizona, and even Oregon, which is liberal but not as voracious tax-wise. Meanwhile, Texas, which has no income tax and is famously friendly to business, gained a net 711,785 people. Low tax states are attracting business and creating jobs, while high-tax states are losing them.
Vermont is losing people on a much smaller scale, but with our tiny population, every productive citizen who leaves to find a better climate for his or her efforts elsewhere is a significant loss. Across the Connecticut river is a good example of what low tax, friendly business policy delivers: the Hanover/Lebanon area teems with vibrant high-tech organizations, many started in the last decade or so, while our side of the river stagnates.
It seems unlikely that our politicians will change the economic course of our state in the near future. The Democrat candidates for governor will probably strive for votes by promising even more government programs, but the handwriting on the wall is clear: Vermont is going down the tubes unless it finds ways to attract new investments that create real jobs, not seasonal or tourist-dependent ones. A reaction from a local resident down here in Florida is instructive: he said “I love Vermont. It’s so beautiful. What’s the name of that communist senator you have?” I told him he was thinking of Bernie Sanders, and he isn’t a communist, just a socialist.
But the perception is there. I doubt if my new friend will be investing in our state any time soon.
Election Day 2009 brought a few surprises and many interpretations of the results. The main headlines were garnered by Republican victories in gubernatorial contests in New Jersey and Virginia. David Brooks, in a New York Times column, analyzed the votes of independent voters, the largest group in the electorate, according to him. He says Democrats did poorly in elections partly because of disappointed liberals who think President Obama is moving too slowly, but mostly because of “anxious suburban independents who think he is moving too fast.” He cites “suburban rebellions” across the country where Republican candidates defeated entrenched Democrats in local elections.
Furthermore, still according to Brooks, Americans have moved to the right in the past year on many key matters, including trust in government, regulation, unions, abortion, immigration and global warming! Over the past seven months, people who say government is doing too many things better left to business has increased from 40 percent to 48 percent, according to a Wall Street Journal/NBC News poll. Significantly, I think, only 31 percent of Americans believe Congress should spend even more money to boost the economy, while 62 percent, twice as many, worry about keeping the deficit down, per the same poll.
One more statistic from Brooks’ interesting column: “the share of independents who believe there is too much government regulation of business has jumped from 38 percent to 50 percent.” Come to think about it, although I am a moderate Republican, I think like an independent. I don’t subscribe to many of the ultra-conservative lines of thinking espoused by Rush Limbaugh et al. But some basic problems with the economy have been exposed. Paraphrasing Brooks – first, Wall Street got out of hand, now Washington is too big a part of our economy. Government needs to get back to what it’s supposed to do: schools, fixing roads, basic research, etc. Lines of restraint (self-discipline by industry) need to be restored, and our great economic engine will take off again. Brooks says that independents support the party that will most likely lead to stability, and currently they favor Republicans to fill that bill.
(This essay first appeared in the Vermont Standard.)
Calling David Brooks a conservative is no different from calling Stalin a humanitarian. You can pin the name on but it doesn't make it so.
"The Democrat candidates for governor will probably strive for votes by promising even more government programs,..." is so true but for one item. These programs require OPM and that is in very short supply.
Jack up the taxes; let us see how many other businesses fold their tents and move or just fold.
A fast calculation says every person in the state owes $150 each just to get out of the hole this year. That's people on their deathbed to newborn, cough it up. A WAG says maybe 250,000 taxpayers in the state, that makes it $350± each, if they have it. Good luck!
Wall street might have gotten out of hand, but Congress beat them to it. They really got the ball rolling with LBJ and the "Great Society." That War on Poverty turned out to be a War on the Poor. The Government kick butt in that one.
The GOP is as much to blame. With few exceptions, they're all RINO's.
Posted by: Vermont Woodchuck | November 14, 2009 at 02:53 PM
Washington has always been too big a part of the economy since the 1960s, it's not like we've ushered in a novel era here - the sheer size of the spending now, however, dwarfs past lunacy, to the point where I cannot conjure sufficiently descriptive adjectives to define the monstrosity that is projected federal spending.
California's problems are the same problems the federal gov't has, and the same problems that VT has - wild, unchecked increases in federal spending/liabilities, with no corresponding revenues to match. At a certain point, taxation tips businesses into the red, constrains growth, and tax revenues dry up. Surprisingly, legislative "leadership" takes this as their cue to double-down on what did not work in the first place, and they increase taxes and spending to fix the problem. They're like gambling addicts - if they roll the dice just one more time, maybe they'll win it all back.
There are no shortcuts. Everything has a cost. The sooner we start electing people to office who can grasp this basic concept, the better off the citizens will be. Until we send politicians the message, however, we own their actions just as much as they do. If we're really looking to change things, change the incumbency rate - then you'll see politicians making decisions in the best interests of all citizens, not just those that vote for them.
Posted by: Chris Campion | November 15, 2009 at 08:54 AM
For those who "threaten" to leave little ol' Vermont, I dare say, as a Michigander-Flatlander, exiled in Vermont for 14 years, "I'd rather be here in Vermont right now, and I sure am glad I am". Luckily, I am still working here in VT, and have done better here than in VT (since here we compete somewhat with Boston market in my field).
But if you want to leave, you can always go to the small town of Vermontville, MI (pop. 793 +/-). It was settled by folks from Castleton and East Poultney and other areas of VT in the years hence from 1836.
http://www.vermontville-mi.gov/about.htm
Where else can you go? The rest of the nation's economy is tanking as well.
Vermontville is a nice town in Eaton County. I once visited there in foliage season in the 1980s. It's just a short drive from the capitol city of Lansing.
http://www.vermontville-mi.gov/
But I choose to stay here in Vermont with real ski mountains. You can drive from Vermontville, MI to northern MI ski "hills" in about 3-4 hours (for a whopping 500 vertical feet)!
Posted by: Ron Pulcer | November 20, 2009 at 08:54 AM
Ron, you might address why the economy is tanking in so many places.
And why it ISN'T tanking everywhere.
Vermont runs on OPM, like MI and many other blue states that had to have the latest and greatest social engineering activity, the newest politically correct program. To get these past the voters, they "funded" them by robbing the AOT budget for years. You now see the results.
Now Vermont is hoping for more OPM to cover the shortfall in revenues and the looming abyss of the pension programs.
As Capital One says, "What's in your wallet?" Because that's from where all this money has to come.
If you want to see what is going to happen, get the books and look up Rome. All the civil servants and no one to pay for it.
Look at Wiemar Germany for a dose of fiat money.
Look at the Soviet Union for a Command Economy and how well that worked.
Then look at Vermont as a microcosm of all that; zoom out to look at the US and grab your ass and hang on tight. You AIN'T SEEN NOTHING YET!
Posted by: Vermont Woodchuck | November 20, 2009 at 12:04 PM