While it's chic to complain about the evil of taxes and government, there's an implicit assumption that higher taxes translate to more government services (the age old argument between liberals and conservatives generally revolve around how much government services, and therefore government size, is optimal.)
But do higher taxes actually bring about superior public goods? William Voegeli, in this op-ed piece in the Los Angeles Times, doesn't think so. He compared California (a high-benefit (supposedly)/high-tax state) to the low-tax state of Texas:
One way to assess how Americans feel about the different tax and benefit packages the states offer is by examining internal U.S. migration patterns. Between April 1, 2000, and June 30, 2007, an average of 3,247 more people moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas had a net weekly population increase of 1,544 as a result of people moving in from other states. During these years, more generally, 16 of the 17 states with the lowest tax levels had positive "net internal migration," in the Census Bureau's language, while 14 of the 17 states with the highest taxes had negative net internal migration.
These folks pulling up stakes and driving U-Haul trucks across state lines understand a reality the defenders of the high-benefit/high-tax model must confront: All things being equal, everyone would rather pay low taxes than high ones. The high-benefit/high-tax model can work only if things are demonstrably not equal -- if the public goods purchased by the high taxes far surpass the quality, quantity and impact of those available to people who live in states with low taxes.
Today's public benefits fail that test, as urban scholar Joel Kotkin of NewGeography.com and Chapman University told the Los Angeles Times in March: "Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California. Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California's government and the middle class is constantly being renegotiated to the disadvantage of the middle class."
As a long-time resident of California (whose paycheck got even smaller as the State forcibly imposed a higher withholding), I don't mind paying higher taxes if I got something out of it - so it's intriguing to find out that the reality may just be the opposite: Link
How about a much more direct measure of what people want? I suggest that from time to time qualified members of the public should be allowed to pick how they're governed - perhaps in some sort of ballot.
That would be better than the truth. The truth is money is being borrowed by the billions. If they only had our taxes they would have to make some big spending cuts.
Not to echo Neal too closely or anything, but it's remarkable the extent to which people are still surprised or "intrigued" by inefficiencies in government.
For instance, the "top" schools besides CA are found here:
http://www.psk12.com/rating/USthreeRsphp/STATE_US_level_Elementary_CountyID_0.html
And...
http://www.psk12.com/rating/USthreeRsphp/STATE_US_level_Middle_CountyID_0.html
And if you look at what each state spends per pupil, found here:
http://www.epodunk.com/top10/per_pupil/index.html
You do see a general trend, there is exceptions no doubt. But the states that spend more on students seem to produce better students. This is just using that tax money wisely.
There are probably better ways to measure the net benefits of various state tax/benefit systems.
This smells like a libertarian-republican spin job.
The value of services to taxes is an interesting metric, but needs to be broken down item by item to have any real meaning. For example, CA has huge costs paying not only for it's many State workers, but paying extra for relatively low skilled workers that are well unionized, labor that's overvalued compared to what can be had in states where unions are relatively toothless. This is an example where high taxes don't translate into better or more services, just higher overhead.
Interestingly, CA is one of those states that tends to pay more into the federal system than it gets back. Western, Northeastern, and mid Northern States tend to get back less in funds than they pay out. It is curious that who pays also seems to correlate roughly with Blue and Red States politically, Red States tending to receive more than they pay, Blue States tending to pay out more than they get. Basically, Blue subsidizes Red. It'd be really interesting to find what kind of dynamic is at work there.
I bid the rotting zombie remains of the LA Times bon voyage upon their impending relocation to Houston!
However, it seems to me that our tax dollars don't just disappear, anyway. They turn into salaries for government workers, contractors and teachers as well as educations for our children. Government workers take those salaries and spend them on food at grocery stores, tipping wait staff and clothing, etc. Taxes are the most effective way (or should be if we didn't have disproportionatly low taxes on our richest citizens) of moving money from the top of the tax bracket back to the bottom where it can start moving back up again.
The big problem with the "trickle down" theory has always been that money doesn't trickle down, it flows up. People at the bottom always give their money to the wealthy who own their mortgages, grocery stores and clothing outlets. But, only some of tha money comes back down in the form of salaries. A lot of it ends up in CD's and overseas bank accounts which takes it out of circulation, slowing the economy. Taxes are a necessary method of moving money around.
While I think the above article is more accurate than some give it credit for, in a way I wish they were right that fewer people were moving here--and not just for oil jobs which is such a cliche notion, as if all we have are cows and drills--because some of those people moving will settle and then vote in the very restrictive taxes that they moved to escape.
First, state taxes are in general much less than federal taxes. High-tax states tend to have higher per capita incomes, resulting in federal grants to states that tend to move benefits from high-tax states to low-tax states. So high-tax states get better states benefits, but are penalized by the federal government's policies.
Second, those people that move to low-tax states- they're moving there from high-tax states. They may not realize it, but they've become accustomed to all the services those taxes provide. When a critical mass of such people arrive (as is starting to happen now with New Yorkers in many parts of North Carolina), these new arrivals start demanding the services they used to take for granted. Taxes rise.
If there is validity to the claim that people prefer low-tax states, it is (at least in part) either because of a form of arbitrage- some services are being offered in states while residents of other states indirectly pay for them, or because of the ability of citizens to become accustomed to services (consider them the norm) and not take them into account when deciding to move, as opposed to more easily quantified items like taxes.