SID SALTER: Contradictions, including taxes, conflict state’s politics

By Sid Salter

The Gallup poll recently tapped Mississippi as the most conservative state in the U.S., with 50.5 percent of those polled in the state identifying their political views as “conservative.” Rounding out the “top 10” conservative states in order were Idaho, Alabama, Wyoming, Utah, South Dakota, Louisiana, North Dakota, South Carolina and Arkansas. In order, the District of Columbia topped the states of Vermont, Rhode Island, Massachusetts, Connecticut, New York, Oregon, Colorado, Washington and New Jersey as the nation’s most liberal venues, according to the pollsters.
Yet despite the state’s conservatism – a conservatism embraced most fervently of late by an emerging group of almost libertarian voters calling for smaller government, less taxes and less government regulation – there is the matter of Mississippi’s gnawing, unrelenting poverty that ranks the state as the poorest in the union.
Mississippi’s poverty dictates – at least under current federal law – that federal per capita spending in this state is heavy and that it offsets a substantial state taxpayer burden borne in more affluent states for government services.
How substantial? In Fiscal Year 2008, total per capital federal spending in Mississippi was $10,214.70, ranking Mississippi 10th in the nation in terms of federal tax dollars received according to Census data. At the same time, Mississippi ranked 49th in the nation in FY 2008 in per capita federal tax revenues paid according to the Internal Revenue Service.
That also means Mississippians in FY 2008 received just over $2.37 per capita in federal spending for every dollar paid in federal taxes.
That disparity is a key component in explaining another seeming anomaly in state government finance. While Mississippians chafe as much as anyone else in the country over taxes, the facts are that in FY 2009 Mississippi taxpayers ranked 50th in the country in terms of their per capita state and local tax burden at $2,678 per capita according to the Tax Foundation. Is that because of the state’s poverty? Adjusted as a percentage of state income, Mississippi’s per capita state and local tax burden ranked 36th in the nation.
At the same time, Mississippi’s per capita state revenues ranked 16th in the nation at $5,709. That’s with the lowest per capita income in the nation at $30,689 and per capita state and local public debt of $4,549, ranking Mississippi 47th in the nation in FY 2008.
So just how do taxes in Mississippi stack up against the national average? State taxpayers pay 25 percent of their taxes as property taxes, 16.8 percent as individual income taxes, 4.2 percent as corporate income taxes, 34 percent as sales taxes and the other 20 percent in all other state taxes. Nationally, state taxpayers average 30.8 percent of their taxes as property taxes, 22.9 percent as individual income taxes, 4.3 percent as corporate income taxes, 22.9 percent as sales taxes and the other 19.1 percent in all other taxes.
The message in the 2010 mid-term congressional elections of a smaller government that cuts or at least holds the line on taxes resonated with voters and is expected to do so again in the 2011 statewide elections and in the 2012 federal elections as well. The massive, ever-increasing national debt and the yawning federal deficits suggest that course to be both prudent and long overdue.
But in poor states like Mississippi, a smaller federal government comes with a price in terms of the quality and scope of public health care, public education, highway and bridge construction and maintenance, defense contracting and a host of other services and government functions.
State legislators who will campaign on much the same issues at the state level – no new taxes, smaller government, etc. – as have their congressional colleagues know this better than most. They know, too, that state taxpayers earning the lowest per capita income in the nation can’t step in and bear the brunt of the state tax hikes necessary to offset the kind of significant federal spending cuts that will be necessary if congressional campaign rhetoric begins to match congressional spending on Capitol Hill.

Sid Salter is a syndicated columnist. Contact him at 662-325-2506 or ssalter@library.msstate.edu.