Previous analyses of “by the numbers” can be accessed by entering the phrase in the search box above. This is the third and final post this month where we look at the numbers to truly find out how good, not likely, or bad, most likely, the American political class is doing in managing our tax dollars, protecting our freedoms, and resolving major issues that affect all of us.
1) We have often spoken about how people want to be free and that desire always includes the freedom to keep as much of their hard earned wages as possible. By keeping more of their hard earned wealth, they have more freedom to live their lives as they please. Those options could include getting their kids into better schools, taking care of their favorite charities, starting their own business, living in a bigger house, etc.
And since freedom is a basic tenet of our heritage, any restrictions on that freedom is really counter American. And as we have discussed so many times, people want to be free and that is why they move out of high tax states and cities in order to keep their wealth and keep their freedom. We have shown that states like New York, Illinois, New Jersey, California and others are losing population and businesses, and now Congressional seats, as are high tax cities such as Chicago, NYC, and San Francisco.
Self Magazine recently ran an analysis, using Bureau of Labor Statistics information, to show why people are leaving high tax areas to regain their freedom. The analysis attempts show how much an average worker in each state will be taxed during their working life using a set of reasonable set of work assumptions:
- In their analysis, they found that over the course of an average state citizen's life, a worker/resident of New Jersey will pay a whopping 49.51% of their lifetime earnings in taxes to all levels of Federal, state, and local governments.
- This is incredible, almost half of what someone in New Jersey will earn in their lifetime will be signed over to government authorities in various forms of taxes.
- In my opinion, this is economic slavery, about 50% of what I earn belongs to the government!
- No wonder twice as many people are leaving New Jersey than are moving into New Jersey, people want to be free.
- But New Jersey is not way different from a lot of other, mostly liberal/Democratic states since Rhode Island bureaucrats, taxes, and officials confiscate 46.73% of residents’ lifetime earnings.
- New Hampshire residents fork over 45.99% of their lifetime earnings.
- California, which recently lost a Congressional seat because so many people are leaving the state because of a number of reasons including high taxation, snatches 44.98% of residents lifetime earnings.
- Massachusetts claims 43.96% of residents' earnings.
- New York, another state losing a Congressional seat because of out migration, takes 43.80% of earnings.
- Vermont takes 43.14% of earnings.
- Illinois takes 42.87% of earnings.
- Connecticut takes 42.79% or earnings.
- Washington state takes 41.13% of earnings.
The analysis then does another interesting bit of number exploration. Rather than look at just the percentage of wealth that is confiscated by politicians in some states, the analysis estimated how much in taxes a resident would pay in their lifetime if they lived in each state. They found that:
- An average New Jersey resident/worker, would pay almost a MILLION DOLLARS in all forms of taxes over their lifetime, $931,698.
- This is not a big surprise given we just found out that New Jerseyans pay almost half of their earnings and wages taxes.
- A Massachusetts worker would pay, on average, $827,185 in lifetime taxes.
- A Connecticut resident would pay a total of $805,213.
- A DC resident would pay $789,934.
- A New Hampshire resident would pay $778,837.
- A Rhode Island resident would pay $766,521.
- A New York resident would pay $734,563.
- A California resident would pay $710,882.
- A Maryland resident would pay $699, 586.
- An Illinois resident would pay $693,792.
Now, you may be asking what about the other states, are they just as high in lifetime earnings being confiscated by government entities? Rather than go into minute details, consider my personalization:
- I spent my entire life until 2005 living in New Jersey, paying very high taxes across the board, especially property taxes, but also high income, sales, and other taxes.
- If I had stayed there and I believe the Self Magazine analysis, I would have paid almost a million dollars in taxes during my working life.
- However, realizing that I was paying a lot and getting very little from the government that was taking my wealth, I moved to Florida in 2005.
- Immediately, my property tax payments dropped by 75% and my state income tax payments dropped 100%.
- In fact, according to the analysis, if I had spent my entire working life in Florida, I would have paid about $378,184 in total taxes.
- Thus, in theory, I would have kept over $600,000 of my wealth out of the hands of the political class and the government bureaucracies they operate vs. living in New Jersey.
- $600,000 would have given me a lot of freedom to run my life the way I wanted.
- In reality, since I didn't spend my whole working life in Florida, I still have estimated that I am probably over $150,000 richer and more free given my decision to leave the oppressive taxation state of New Jersey.
Consider a previous analysis we discussed that shows how close some of the states the top ten above are close to financial death spiral:
- Illinois - according to the official unfunded liabilities estimate of the state, the state has $195.4 billions in unfunded liabilities. But the more realistic, adjusted estimate is $327 billion, which calculates out to a per resident share of $25,571. Thus, a family of four in Illinois would have to write a check for over $100,000 to pay for their fair share of the state’s unfunded liability burden. This is in addition to the over $100,000 check Chicago residents would have to write for the city’s unfunded liability debt hole, bringing the total state and city share to well over $200,000 per family of four.
- California - the official unfunded liability estimate is $309.4 billion but the adjusted, more realistic number is a whopping $990.7 billion, almost a TRILLION dollars! This computes to a per resident share of $25,146 per resident, over $100,000 for a family of four. This would be in addition to the unfunded city liabilities the California residents of Los Angeles and San Francisco would have to pay.
- Connecticut - the official estimate is only $37.8 billion but the more realistic estimate is a whopping $686 billion or $19,188 per resident and almost $80,000 for a family of four.
- New Jersey - the official estimate is $142.3 billion but the more realistic estimate is a little higher at $163.1 billion, indicating that New Jersey has a little better feel and handle on what is realistic when it comes to its true unfunded liabilities. But it still comes out to about $18,351 per resident, almost $80,000 for a family of four.
- New York - the official estimate is $77 billion but, unlike New Jersey, it looks like New York has no clue on what its true unfunded liability is since the adjusted estimate comes in at $303.8 billion. This computes to about $15,508 per resident.
Three conclusions from all of this:
- People want to be free and will go where they can maximize their wealth, which in turn makes their lives better, i.e. they are getting out of high tax cities and states.
- The very high amount of taxes many American pay as a percentage of their earning levels is a form of economic slavery.
- High taxation does not result in better and more efficient government services, it just provides politiciians more money to waste on stupid, inefficient, and ineffective government programs and projects, which has placed many high tax states and cities on the path to financial collapse.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
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