This post was written by Nick Johnson, Vice President for State Fiscal Policy with the Center on Budget and Policy Priorities. This originally appeared on the Center’s Off the Charts blog and is reposted with permission.

Yesterday’s Wall Street Journal editorial supporting a proposal by Oklahoma governor Mary Fallin to phase out the state’s income tax contains a slew of incorrect or misleading statements.  For instance:

• The editorial wrongly asserts that states without income taxes have had stronger economic growth than other states, echoing a claim from a recent report from economist Arthur Laffer and the American Legislative Exchange Council.  As we have explained:

A key flaw in the Laffer analysis is that all of its measures of “economic growth” are really just measures of population growth.  As a state’s population grows, you would expect its total number of jobs and its total economic output to grow with it.  But, that’s not the same thing as a state’s per-capita performance.

A study from the Institute on Taxation and Economic Policy shows that residents of states with relatively high income tax rates are doing as well, if not better, than residents of states lacking a personal income tax in terms of per-capita economic output and household income.

• The editorial claims that states with relatively high income tax rates have faced the biggest budget shortfalls.  That’s simply not true.  Four of the nine states without an income tax — Nevada, New Hampshire, Texas, and Washington — have closed (or are closing) above-average shortfalls for the upcoming fiscal year, while some of the high-income-tax states that the editorial mentions, like Illinois and Maryland, had below-average shortfalls.Also, the editorial’s boast that no-income-tax states “manage to balance their budget nearly every year” makes little sense, since all states except Vermont are required to balance their budgets.
• The editorial cites Governor Fallin’s warning that Oklahoma is about to become an “income tax sandwich” as neighboring states consider eliminating their income taxes.  It’s true that anti-tax activists have been promoting income tax repeal in Kansas and Missouri for years.  But they haven’t succeeded.   In fact, Governor Fallin’s proposal would make Oklahoma the only state ever besides oil-rich Alaska to repeal its income tax.

The editorial correctly notes that many of Oklahoma’s leading economists have challenged claims that eliminating the income tax would help the economy.  But it wrongly suggests that non-economists feel differently.  A recent survey found that Oklahomans oppose the tax cut by a 42-35 percent margin, partly because they overwhelmingly view an educated, well-trained workforce as more important than low taxes — and a state that lacks income tax revenue will find it harder to find the resources to educate its own people.

Photo by flickr user jukebox909 used under a Creative Commons license.

Hardly a day goes by without news of the latest opinion poll surveying the attitudes of Americans or Oklahomans. While many polls are carefully worded and fairly presented, some issue polling is so sloppy or biased that one suspects its only purpose is to promote the political agenda of the pollster or their client. This certainly seemed to be the case with a recent Rasmussen poll of American’s attitudes on poverty, welfare, and immigration.

The poll, which was released to coincide with the fifteenth anniversary of the 1996 welfare reform law, seems at first glance to suggest that Americans are unhappy with the nation’s welfare system and believe too many undeserving people are receiving public assistance.  But a closer look suggests that the poll reveals next to nothing about what Americans think. Read the rest of this entry »

A new poll from the Pew Research Center presents interesting findings about the state of public opinion regarding the state fiscal crisis.  A late June poll of 1,001 adults found a majority of respondents saying that states should fix their own budget problems by cutting services or raising taxes,  rather than relying on additional help from the federal government (In the poll, just 26 percent agreed that,”The federal government should give more money to states, even if it increases deficit,” compared to 56 percent who said, “States should take of this, by rising taxes or cutting services). However, when asked about the actual options for balancing state  budgets, solid majorities of Americans said no to everything:

Pew Research/National Journal Congressional Connection Poll, June 2010

The message from the American public couldn’t be clearer: balance the budget, but don’t cut services and don’t raise taxes. With such a strong popular mandate from the voters, is it any wonder that our elected officials are so eager to make the tough political choices?