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Vincent J. Matteo's homegrown, Stossel-like obliviousness

August 3, 2010 - Mike Maneval

Recent commentary by Williamsport-Lycoming Chamber of Commerce CEO Vincent J. Matteo in August's Chamber Connection looks at the Tax Foundation's rankings of state tax codes and finds Pennsylvania lacking. After observing Pennsylvania's state and local tax burden as a percentage of income averages to 10.2 percent, while Nevada's is 6.6 percent, Matteo opines, "we cannot go on this way. We cannot expect our businesses to stay if we over-tax them, we cannot expect our young people to stay if there are no jobs."

What Matteo does not mention is that Nevada, the state he touts for having the lowest tax burden in the nation, has the highest unemployment rate in the country. Nevada also "boasts" the highest foreclosure rate, the third-highest crime rate, and a larger percentage of residents living below the poverty line than Pennsylvania.

Pennsylvania and Nevada are not the only states on which Matteo comments: He observes Texas and Wyoming as having lower rates for specific taxes, and Iowa as having the highest corporate income tax rate and New Jersey ranking no. 1 in the aforementioned local and state tax burden.

How do these states measure up compared to Pennsylvania on the other quality-of-life indicators, the ones Matteo neglects?

16.6 percent of Texans live below the poverty line, compared to 11.7 percent of Pennsylvanians. While Texas does have a lower unemployment rate it ranks 12th in foreclosures, well ahead of Pennsylvania at 34th and has a higher crime rate. Iowa and New Jersey both have smaller percentages of residents living below the poverty line. Iowa's unemployment rate is 6.8 percent and New Jersey's is 9.6 percent, only slightly higher than Pennsylvania's. Iowa and New Jersey both have better crime rates than Nevada and Texas. While New Jersey's crime rate is higher than Pennsylvania, Iowa is about the same, ranking 33rd.

Wyoming, however, has low taxes, a low crime rate - 44th in the nation - and lower foreclosure and unemployment rates. But it is important to note one other category Wyoming does lead in: Federal assistance. Wyoming leads the nation in federal expenditures per resident, with the state collecting $3,626 per resident, compared to Pennsylvania's $1,528 per resident.

Matteo's commentary in many ways reminds me of John Stossel's remarks when he visited Williamsport and blithely assured an audience that Arizona was more prosperous than a Pennsylvania he characterized as over-regulated. As I observed in May, Arizona's "prosperity," like Nevada's, translates to higher foreclosure and crime rates and a larger percentage of people living in poverty. And cherry-picking statistics from the tax codes or regulatory oversight does not obscure that reality. 


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