Vance Ginn Economics
  • Home
  • About
  • CV
  • Media
  • Blog/Podcast
  • Show/Speeches
  • Publications
  • Teaching
    • ECON 2301-Princ of Macro
    • ECON 2302-Princ of Micro
    • ECON 3352-Energy Eco
  • Home
  • About
  • CV
  • Media
  • Blog/Podcast
  • Show/Speeches
  • Publications
  • Teaching
    • ECON 2301-Princ of Macro
    • ECON 2302-Princ of Micro
    • ECON 3352-Energy Eco

News: Louisiana is one of the most federally dependent states

3/16/2023

0 Comments

 
Picture
​Louisiana is one of the most federally dependent states in the country, ranking 10th in a recent analysis.

The personal finance website WalletHub released a report Wednesday that ranked states’ dependency on the federal government based on three metrics: return on taxes paid to the federal government, share of federal jobs, and federal funding as a share of state revenue.

The study ranked Louisiana in 10th overall with a score of 57.46, though the state government’s dependency ranked third. Residents’ dependency was ranked 22nd.

Vance Ginn, chief economist at the Pelican Institute, told The Center Square much of Louisiana’s dependency derives from the state’s high poverty rate — 19.6% in 2022 — and the federal funds from various programs that flow into the state as a result.


​Forty-four percent of all state funding in Louisiana comes from Congress, and the Pelican Institute is working on “finding ways for Louisiana to have a comeback” that boosts businesses and employment, which in turn reduces poverty.

“Louisiana is overly dependent on the federal government and the way to reduce that depends on getting more Louisianans back to work,” he said. “The way to get people back to work is removing barriers in the private sector, restraining government spending, providing tax relief, and reducing regulations.”

The WalletHub analysis shows only state governments in Alaska and Wyoming receive more funding as a share of state revenues than Louisiana.

Neighboring Mississippi ranked third overall in the study, while Arkansas was ranked 28th and Texas 29th.

Other states in the top 10 most dependent on federal funding include Alaska in first, followed by West Virginia, Mississippi, Kentucky, New Mexico, Wyoming, South Carolina, Arizona, and Montana.

New Jersey was ranked as the least dependent state, followed by Washington, Utah, Kansas, Illinois, California, Massachusetts, Iowa, Delaware, Nevada, and Colorado.

The analysis also derived an average ranking for red and blue states, based on how residents voted in the 2020 presidential election.

Democratic states produced an average ranking of 30.68, compared to the average ranking of 20.32 in Republican states, suggesting Republican states are generally more dependent than Democratic states.

The study also examined how tax rates factor into the equation.

Louisiana fell into the “high dependency, low tax” category, with a tax rate that’s ranked 25th in the country.

Other analysis compared gross domestic product per capita compared to dependency on the federal government, and WalletHub placed Louisiana in the “high dependency, low GDP” category with a GDP per capita ranking of 40th.

Originally published at The Center Square. 
0 Comments

Despite High Inflation, Americans Are Still Spending Like Crazy

3/7/2023

0 Comments

 
Picture
Despite the on-going, sky high, Biden-flation, American's are spending like crazy. And it's a little bit puzzling. But then again, it really isn't, because we want what we want when we want it, and we want it now!

"But that is gonna start to come to a halt very quickly, as inflation continues to take a bite out of their consumption habits" said Dr. Vance Ginn, president of Ginn economic consulting, "And part of the spending numbers that we see are really just from inflation. If you adjust a lot of these for inflation, we're actually seeing declining retail sales."

The other reality is, too many Americans are charging up their credit cards, and living beyond their means.

"A lot of people are also racking up a lot on their credit cards" Dr. Ginn told KTRH, "Credit card debt is up to a record high of over a trillion dollars across the economy, and we've seen that soar just over the last year."

And looking ahead to this year, the clock will eventually strike midnight, and the U.S. will officially be in another recession.

​Originally posted at KTRH News. 
0 Comments

News: Oklahoma Wants to Be the ‘Next Texas.’ Imagine That.

3/2/2023

0 Comments

 
Picture
On a stifling July day, Elon Musk sat across from the governor of Oklahoma under a small white pop-up tent, a red Tesla flag waving from a short pole in an otherwise unadorned field.

That the billionaire was even in Oklahoma, seriously considering putting a gigantic new Tesla factory outside of Tulsa, was a major turning point for the frequently overlooked state. Suddenly, Oklahoma could boast of being on par with its much larger neighbor and rival, Texas. The only other city still in the running for the plant, by that point in 2020, was Austin.

The wide shadow of Texas has long fallen over Oklahoma. Despite offering the same red-state promise of open land, a cowboy ethos and limited government regulations, Oklahoma has found itself a perennial also-ran, especially in recent decades as Texas cities became magnets for new companies and workers from around the country.

In the end, Mr. Musk chose Austin. But the long-shot bid put Oklahoma on the map for relocating companies and workers, and inspired a new resolve to make the state a more appealing place to work and live.

Since 2018, Tulsa has been offering remote workers $10,000 to move to the city for at least a year. In its first year, 70 people took the city up on the offer. In 2021, 950 people made the move. Many stayed.

​
“I can’t believe I live in Oklahoma — it’s like even weird to say,” said Chris Bland, who took the $10,000 and moved in 2021 from an apartment in Harlem, working remotely as an environmental scientist at New York’s Mount Sinai Health System.
Since then, Mr. Bland, 29, has been selling his friends and family on Tulsa — restaurants, bars, $895 a month for a studio apartment downtown — and he has already stayed longer than the single year required by the program, which is funded by the Tulsa-based George Kaiser Family Foundation.

Oklahoma City has taken a different tack, raising money from residents and visitors — in the form of a dedicated 1 percent sales tax — and spending hundreds of millions of dollars in recent decades on things like new parks, a canal, a streetcar system and a basketball arena. The city remade its downtown, and new shops and restaurants replaced those that had long ago vanished.

Many American cities have been spending to improve their downtown amenities, and other states also offer tax breaks and other incentives to try to lure businesses.

But Oklahoma City is now one of the country’s fastest-growing large cities, climbing past Boston and Washington to become the 20th largest by population, with 687,000 people. Still, the state’s growth has been dwarfed by the roaring boom in Texas, which has welcomed a rush of transplants from other states and new immigrants from around the world. The Texas economy is second in the United States only to California, and it has been growing faster.

But Oklahoma officials now see a chance to draft off that boom, selling their state as a place that is just as business-friendly, at a more affordable entry point.

“We hope it’s the next Texas,” said Lt. Gov. Matt Pinnell of Oklahoma, sitting in a Houston seafood restaurant for a series of recent meetings to entice more international energy investment in his state.

More than 100 companies have come to Oklahoma in the last five years, including 29 last year, and another 200 have announced expansions, according to the state Commerce Department, resulting in more than $10 billion in promised new investments. Six companies moved their headquarters to the state.

The rivalry with Texas nonetheless remains a bit one-sided. Oklahoma has three Fortune 500 companies headquartered in
the state, all in the oil and gas industry; Texas has more than 50. Asked about the threat posed by their neighbor, Texas officials did not see one.

“Texas is dominating for the 18th year in a row as the Best State for Business,” Andrew Mahaleris, the press secretary to Gov. Greg Abbott, said in a statement, citing a ranking in Chief Executive magazine. “Texas will continue to remain number one because of the unmatched competitive advantages we offer: no corporate or personal income taxes, a predictable regulatory climate, and a young, growing and skilled work force.”

But soaring housing prices in Austin and other Texas cities are undermining some of the state’s competitive advantage.

“There are a lot of states around here that are a lot cheaper to live,” said Vance Ginn, an economist in the Trump administration and a former chief economist at the Texas Public Policy Foundation, a conservative think tank. “That is a concern.”

Don Ward, a Texas native and entrepreneur, is moving his small technology business, Laundris, to Tulsa from Austin. Mr. Ward, 53, said he worried about the rapid rise of housing and other costs, and Tulsa offered some of the small-city feel that he said had been vanishing from Austin, whose population is now just under 1 million.

“Austin has been more focused on working with the Elon Musks of the world,” Mr. Ward said. “Tulsa gave me an opportunity to be a big fish in a smaller pond again.”

Reliable electricity is another issue Oklahoma is using as a selling point. The failure of the Texas electrical grid during a brutal winter storm in February 2021 fueled new interest in states, like Oklahoma, with energy infrastructure seen as more reliable.

Gov. Kevin Stitt, a Republican, boasted in a recent interview about not only the state’s “affordable, reliable energy grid” but his effort to do away with 25 percent of the state’s regulations on businesses.

Seated in his office in the Capitol, Mr. Stitt conceded that Texas has long had a reputation as a good place for business. “But it’s getting overcrowded,” he said, noting that commute times around Oklahoma City are far shorter than those in Dallas-Fort Worth.

It has long been easy to drive around Oklahoma City. The problem was a lack of things to drive to. The need became apparent decades ago, when the city lost out to Indianapolis for a United Airlines maintenance center. Company executives had visited Oklahoma City and found they simply could not make their employees live there.

“It was terrible,” said David Holt, 43, who grew up in Oklahoma City in the 1990s and is now in his second term as mayor. “All my peers who had any wherewithal went to Dallas or Houston or the more adventurous off to California or New York.”
The city began a long process to make itself more attractive, one that continues. On a recent weekday, a billboard across from the Oklahoma City Thunder arena proclaimed “Always Onward” over a newly opened park of spindly young trees. (The state, for its part, has been trying a different tagline: “Imagine That.”)

The city has also been transforming politically. Once reliably red, Oklahoma City is now solidly purple, having narrowly favored former President Donald J. Trump in 2020 but voting by a wide margin for the losing Democratic candidate for governor last year.

Governor Stitt, a businessman and political newcomer when first elected in 2018, said that he did not worry that efforts to attract newcomers to the state’s urban centers would alter its political identity.

“We’re finding people moving here from the quote unquote liberal states because of their policies,” he said, adding that he and other state leaders were clear about their conservative principles. “It’s not for everybody. If this is not who you are, great, you don’t have to live in our state.”

Tulsa has similarly been shifting politically, and in its attitude about itself, said Mayor G.T. Bynum, also a Republican in a nonpartisan office. He said the amount of investment in the city was akin to the 1920s oil boom and, because of Tesla’s interest, the city was hearing from other electric vehicle and battery companies. “Elon Musk netted us tens of thousands of dollars in free advertising,” Mr. Bynum said.

Even so, by the time he visited, Mr. Musk may have already made his decision against Oklahoma, for many of the same old reasons.

“The fundamental problem I have is getting people to move out of California,” Mr. Musk told the head of work force development in Oklahoma in 2020, according to documents obtained by The Associated Press. “Austin is one of the few places to which they will move.”

The population of Austin has grown more than 20 percent in the last decade. But Oklahoma City has also grown by nearly that much during that time period, roughly 18 percent, a fact Mayor Holt attributes in part to his city’s ability to appeal to those seeking what Austin used to be.

“We have a lot of the things that you would expect to find in a large American city, but without the hassle,” he said. “I think that’s a combination that maybe only has a finite window. It’s the combination Austin offered 20 years ago, and then everybody took them up on it, and now it’s too crowded.”

Originally published at The New York Times. 

0 Comments

News: Louisiana's combined sales tax rate is the nation's highest

2/16/2023

0 Comments

 
Picture
By Victor Skinner | The Center Square contributor | Feb 16, 2023

(The Center Square) – Louisiana’s combined state and local sales taxes are the highest in the nation, a reality critics contend is one of several tax and spending issues plaguing the state.

The Tax Foundation released a report last week that compares state and local sales taxes across the nation, ranking states based on both the state sales tax and combined state and local rates.

The research shows that as of Jan. 1, Louisiana’s state sales tax of 4.45% ranks 38th from the top. But when that figure is added to the average local tax rate of 5.10%, the state’s 9.55% combined rate becomes the highest among 50 states and the District of Columbia.

"Sales taxes are just one part of an overall tax structure and should be considered in context," according to the report. "For example, Tennessee has high sales taxes but no income tax, whereas Oregon has no sales tax but high income taxes. While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts."

The report comes as Louisiana lawmakers are studying potential changes to the state’s tax structure ahead of the 2023 legislative session. Vance Ginn, chief economist for the Pelican Institute, contends that excessive government spending is one factor driving higher taxes in Louisiana, though he believes personal income taxes are having the biggest impact on the state’s economy.

"We have got to find a way to restrain excessive government spending at the state and local level," he said. "The sales tax is high in Louisiana … but really the focus should be on the burdensome income tax."

The Pelican Institute is advocating for a flat income tax that eventually phases to zero.

"That will allow for more job creation and economic growth," Ginn said.

The Tax Foundation ranks Louisiana 25th nationally for income taxes, 32nd in the nation for corporate income tax, and 23rd for property taxes. Those rankings, combined with other measures, puts the state in 39th place overall in the foundation’s 2023 State Business Tax Climate Index.

The foundation’s most recent report notes that sales tax rates can have a significant impact on where residents make major purchases and where businesses locate, and it cites examples of states that have increased per capita sales by maintaining rates lower than their neighbors.

The analysis shows Louisiana’s 9.55% combined sales tax rate is more than 2% higher than Mississippi’s 7.07% rate, and 1.35% higher than Texas at 8.20%. Arkansas’ combined rate of 9.46% is the third highest nationally, behind Louisiana and Tennessee at 9.55%.

California has the highest state sales tax rate at 7.25%, followed by four states tied for the second-highest rate, at 7%: Indiana, Mississippi, Rhode Island, and Tennessee.

Five states do not have a state sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. The lowest rates for states with sales tax include Colorado at 2.9%, followed by Alabama, Georgia, Hawaii, New York and Wyoming, all at 4%.
States with the highest average local sales tax rates include Alabama at 5.25%, Louisiana, Colorado at 4.88%, New York at 4.52%, and Oklahoma at 4.48%.

Behind Louisiana with the highest combined state and local sales tax is Tennessee, Arkansas, Alabama at 9.25% and Oklahoma at 8.98%.

States with the lowest average combined rates are Alaska at 1.76%, Hawaii at 4.44%, Wyoming at 5.36%, Wisconsin at 5.43%, and Maine at 5.5%.

Originally published at The Center Square. 
0 Comments

News: High corporate tax rates putting clamps on Louisiana's economy

1/26/2023

0 Comments

 
Picture
By Victor Skinner | The Center Square contributor | Jan 26, 2023

(The Center Square) — New analysis shows Louisiana’s top corporate income tax rate is the 15th highest in the nation, a reality critics contend is holding the state back.

Analysis from the Tax Foundation released Tuesday shows that out of the 44 states that levy a corporate income tax, Louisiana’s top 7.5% rate ranks 15th from the top, the highest in the region.

Neighboring Texas does not levy a corporate income tax and instead imposes a gross receipts tax on businesses, while Arkansas’ 5.3% rate ranked 33rd, and Mississippi’s 5% rate ranked 34th.

"The rate is too high, 7.5% ranking 15th in the nation means Louisiana is less competitive, especially with its neighbors," Vance Ginn, chief economist at the Pelican Institute, told The Center Square.

​Ginn noted that the corporate income tax ranking follows a previous report from the Tax Foundation that ranked Louisiana as the 12th lowest state for business tax climate, a measure that takes into account other factors.
He contends lawmakers can take action to improve the situation.

"What we’ve been looking at is finding ways to flatten the corporate income tax," Ginn said, noting that the state’s current system has three brackets.

Reducing the three brackets into one would help in the short term, he said, but the long-term focus should be on "eliminating the income tax and finding ways to limit government spending," he said.

"What we’ve been looking at is using surplus funds to buy down the corporate tax," Ginn said.

Louisiana "really ultimately needs to be more competitive," he said. "People are moving out. Businesses are moving out."
Ginn pointed to recent U.S. Census data that shows 67,508 residents left the Pelican State between April 1, 2020 and July 1, 2022, with most of the loss through domestic migration.

The Tax Foundation identified 44 states that levy a corporate income tax, which ranged from North Carolina’s 2.5% rate to 11.5% in New Jersey. Behind the Garden State is Minnesota at 9.8%, Illinois at 9.5%, and Alaska and Pennsylvania, which levy top corporate tax rates of 9.4% and 8.99%, respectively.

There are 11 states with top rates at or below 5%. North Carolina is followed by Missouri and Oklahoma at 4%, North Dakota at 4.31%, Colorado at 4.55%, Utah at 4.85%, Arizona and Indiana at 4.9%, and Kentucky, Mississippi, and South Carolina at 5%.

​Nevada, Ohio, Texas, and Washington use a gross receipts tax instead of corporate income taxes, while Delaware, Oregon, and Tennessee impose both gross receipts taxes and corporate income taxes.

"Though often thought of as a major tax type, corporate income taxes accounted for an average of just 7.07% of state tax collections and 4.04% of state general revenue in fiscal year 2021," according to the report. "And while these figures are not high, they represent a substantial increase over prior years. Corporate income taxes accounted for 2.26% of general revenue in FY 2020, which is more in line with historical norms."

Originally published at The Center Square. 
0 Comments

    Vance Ginn, Ph.D.
    Chief Economist
    ​TPPF
    ​#LetPeopleProsper

    Vance Ginn, Ph.D., is founder and president of Ginn Economic Consulting, LLC. He is chief economist at Pelican Institute for Public Policy and senior fellow at Young Americans for Liberty and other institutions. He previously served as the associate director for economic policy of the White House’s Office of Management and Budget, 2019-20.

    Follow him on Twitter: @vanceginn

    View my profile on LinkedIn

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    January 2015
    November 2013
    September 2013
    May 2013
    February 2013
    August 2012
    July 2012
    January 2012
    May 2011
    April 2011

    Categories

    All
    Biden
    Book Reviews
    Budgets
    Capitalism
    Carbon Tax
    Commentary
    Congress
    COVID
    Debt
    Economic Freedom
    Economic Prosperity
    Economy
    Education
    Energy Markets
    Fed
    Free Trade
    Ginn Economic Brief
    Healthcare
    Housing
    Immigration
    Inflation
    Interview
    Jobs Report
    Let People Prosper
    Licensing
    Louisiana
    Margin Tax
    Medicaid
    Minimum Wage
    News
    Occupational Licensing
    Opportunity Project
    Pensions
    Podcast
    Poverty
    Property Taxes
    RAB
    Regulation
    Rules
    School Choice
    Socialism
    Spending Limits
    Taxes
    Tax Foundation
    Testimony
    Texas
    This Week's Economy
    Transparency
    Video
    White House

    RSS Feed

Proudly powered by Weebly