Marcus
Robert Schiller, the Nobel Prize winning economist, suggests people learn from stories rather than just relating facts. I see it differently. Facts are the story.
These are the facts. Indiana has 2.04% of the nation’s population. We generate 1.80% of the nation’s personal income. But we bear only 1.57% of the federal, state, and local taxes combined.
“Well, stop right there,” says my friend, Rathbone Roundemup. He continues, “Everyone knows about our fiscal conservatism here in the Hoosier Holyland. You know what they always say, ‘Never a penny over the ultimate bare necessity; never a penny less than the ultimate public good.’ ”
“I’m not discussing the necessity nor the public good,” I reply. “I’m comparing Indiana’s taxes to those of the all the states combined. Across the United States, taxes are $8,471 per person. Here in the Hoosier state they are only $6,508. That’s $1,962 less for each person living in this state than citizens in other states.”
“Exactly,” he concurs. “Our General Assembly sees that it’s cheaper to live in Indiana than in other states and we can’t afford higher taxes.”
“But our federal taxes, on a per capita basis, have nothing to do with the Legislature. Those taxes are $4,428, a third less than the national level of $6,706.
He interrupts, “Yes, that’s going to happen since we have lower incomes than those in other states.”
“Our state taxes,” I press onward, “on a per capita basis, at $1,815 are 16% higher than nationally,” He doesn’t respond. “Then,” I say, “again on a per capita basis, our local taxes are 32% higher than those in the rest of the country.”
Rathbone leans close. “I tell you why, friend. The reason is sex. Our young men, and young women as well, are not giving us as many babies as we need. I don’t know why, but passion, raw and righteous, just isn’t what it was, times gone bye.
“If we had more babies,” he concludes, “our per capita figures would be lower, and we wouldn’t seem to have such high taxes.”
“No,” I exclaim. “That’s a neat trick, but I don’t think we can play the baby card here. The problem is income. As I said at first, Indiana has 2.04% of the population, but only 1.80% of the nation’s personal income. We don’t need more people, we do need people who are earning more income.
“Our economic development policies,” I continue, “must be focused on increasing the income of our labor force. That means we need workers who won’t put up with low wages, county commissioners who won’t give subsidies for low wage jobs, and training programs that raise the skill levels of our workers’ futures, not just to fill existing jobs.”
Marcus is an economist formerly at the IU Kelley School of Business. Reach him at mortonjmarcus@gmail.com. Send comments to editorial@therepublic.com.
