Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10.1 6/24/83; site psc70.UUCP
Path: utzoo!watmath!clyde!burl!ulysses!gamma!epsilon!zeta!sabre!bellcore!decvax!dartvax!psc70!tos
From: tos@psc70.UUCP (Dr.Schlesinger)
Newsgroups: net.misc,net.politics
Subject: Re: State Tax Dedudction
Message-ID: <140@psc70.UUCP>
Date: Sun, 16-Jun-85 05:47:45 EDT
Article-I.D.: psc70.140
Posted: Sun Jun 16 05:47:45 1985
Date-Received: Tue, 18-Jun-85 05:25:12 EDT
References: <735@mtuxo.UUCP>, <896@mhuxt.UUCP>, <676@charm.UUCP>
Organization: Plymouth State College, Plymouth, NH
Lines: 32
Xref: watmath net.misc:8119 net.politics:9446


    The Rosenthal article re. very bad effect of removing state and
local tax deduction on education budgets sounds logical on the face of
it, and one can hardly argue with its basic thrust... we all want
schools to be supported.
    However, the facts are almost opposite. The state and local tax
deduction from federal tax (affecting app. 56% of taxpayers in the
state of New York, acc. to what I read) favors the states where the
spending on education has been highest all along, i.e. like New York,
California, Florida... relatively "progressive" states.
    The deduction is widely considered "unfair" in states where the
least is spent on education, e.g. here in New Hampshire. And here's
the rub: New Hampshire, along with the other northern New England
states, still has the old-fashioned town meeting system, where people
vote personally and directly to appropriate the amount of money to be
spent during the year on anything, including their school. They know
and indeed discuss at great length, what impact their votes will have
on the tax rate during the coming fiscal year. They certainly give no
evidence that the deduction affects their decisions... (knowing the
types of business and socioeconomic status of the "folks" one can
fairly well guess that many are now deducting their property taxes...
not because they have such high incomes, but because they are in
situations where they might lose quite a lot by taking the "standard"
deduction.)
    Anyway, the main point is not the individual behavior, but that it
in states where people have direct control over their education
expenditures and when, of course, the deduction has been available,
the spending on education has been drastically lower (both in absolute
terms per pupil and in terms of ability to pay, i.e. "tax effort")
than in states where the people have only very indirect control of
this... i.e. by electing more "conservative" school board and
legislature if the previous ones are spending "too much."