New Englad - Tax Reform Pioneer?
I read today very interesting post that analyze the reasons why Rhode-Island is moving toward Flat Tax rate. Basically it is because they have no choice! Once neighboring states offer no income tax or flat tax the population and businesses migrations into these states have impact that cannot be simply ignored.
Link: I Fell Over in Shock
In case you don’t know it, New Hampshire (a strongly libertarian state) has no income tax and Massachusetts enacted a flat income tax two years ago (Teddy must have apoplexy). The problem Rhode Island faces is that they are not competitive with their neighboring states. So, small businesses and affluent residents are fleeing to Mass and NH. The whole concept of competitive government actually does work, you know. It’s tougher on the West coast with large states. But even here it works. One of the Liberty Papers contributors, Brad Warbiany, fled California because of its unstable budget, repressive tax structure and high cost of living. And he isn’t the only one, by a long shot. California is growing, but it’s not the middle class that’s growing. And RI has the same problem. So, they are going to try and fix it, because the loss to their neighboring states is clear and obvious. They are even proposing to enact sales tax holidays. My guess is that they lose significant business to Mass on their sales tax holidays.
It turns out that big government liberal ideology can, occasionally, be changed by reality smacking you in the face.
Who would have believed that the tax reform will start from New England?
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Hi there, thanks for the link and trackback. It’s interesting to note that Mass enacted their flat tax in response to New Hampshire not having income tax. The theory of competing governments providing for more liberty, at least economically, seems to be reasonable. I’m willing to bet we’ll see the same thing happen in Europe as more and more Eastern European nations go to low, flat tax structures.
Eric
11 Feb 06 at 9:37 pm
Hi there, thanks for the link and trackback. It’s interesting to note that Mass enacted their flat tax in response to New Hampshire not having income tax. The theory of competing governments providing for more liberty, at least economically, seems to be reasonable. I’m willing to bet we’ll see the same thing happen in Europe as more and more Eastern European nations go to low, flat tax structures.
Eric
11 Feb 06 at 9:37 pm
Which competion will force the federal govrment to reform the tax code is still to be determine
Rogel
11 Feb 06 at 9:42 pm
Which competion will force the federal govrment to reform the tax code is still to be determine
Rogel
11 Feb 06 at 9:42 pm
I don’t know if that will happen. Unfortunately, when the Federal government really has no competition, due to size and difficulty of leaving the USA, it seems unlikely that competition can force a change.
Eric
12 Feb 06 at 5:03 am
I don’t know if that will happen. Unfortunately, when the Federal government really has no competition, due to size and difficulty of leaving the USA, it seems unlikely that competition can force a change.
Eric
12 Feb 06 at 5:03 am
I’m usually a pessimist when discussing the hope to bring back classic liberal values back into the way society behave. however your post demonstrate that a move back into sanity is possible, we just need to find the proper incentive.
Rogel
12 Feb 06 at 9:13 am
I’m usually a pessimist when discussing the hope to bring back classic liberal values back into the way society behave. however your post demonstrate that a move back into sanity is possible, we just need to find the proper incentive.
Rogel
12 Feb 06 at 9:13 am
Revovulotion on Wheels
Yesterday I wrote about the forces that pushing Rhode-Island to change its tax code into a more reasonable one. Today, while reading this article in the Barron I found out that this phenomenon is even bigger. From 2000 through 2004, a net 1.3 …
It looks obvious
12 Feb 06 at 7:09 pm
Revovulotion on Wheels
Yesterday I wrote about the forces that pushing Rhode-Island to change its tax code into a more reasonable one. Today, while reading this article in the Barron I found out that this phenomenon is even bigger. From 2000 through 2004, a net 1.3 …
It looks obvious
12 Feb 06 at 7:09 pm