But we may not have as much discretionary income left as we think. Taxes fund infrastructure, without which a state’s population drops steadily behind other states and countries in education and economic competitiveness. And there is also the “pay me now, pay me later” factor of increased social costs: prisons filled with illiterate or semi-literate inmates; poorly educated citizens who rely on welfare; a $1 million legal settlement to a South Carolina family whose wife/mother was killed when a tractor-trailer spun a lose piece of asphalt on Interstate 20 through her windshield; long lines at the Jefferson County Courthouse, where thousands of people waste endless hours standing in line to transfer a car title or purchase a tag.
The American Society of Engineers estimated in 2009 that Americans spent $67 billion annually on car repairs caused by shoddy road conditions. How much does graduation from a fine public high school or university add to our lifetime earnings? What economic penalty do we pay to live in a low-tax state?
Those were the questions rattling around in my mind one March “Tax Freedom” day in the mid-1990s as I walked across the Auburn University campus headed toward the library. Gov. Fob James had just completed a press conference where he extolled the glories of tax freedom, noting that Alabama ranked No. 1 among the 50 states and the District of Columbia because of our low taxes. After arriving at the library, I plunged into volumes of state rankings that listed just about every quality-of-life issue that differentiates states.
In order not to beat up on my state, I included Mississippi, Louisiana and Arkansas, which trailed us in second, third and fourth places with the lowest taxes. My hypothesis was that there would be a correlation between state expenditures on critical social, economic and educational infrastructure and these states’ quality of life.
Here are some of the standings for the four states. Infant mortality: 3, 5, 6, 18. Low birth-weight babies: 1, 2, 3, 5. Children living in poverty: 1, 2, 5, 7. High school dropouts: 10, 12, 13, 17. Persons 25 years and older with less than a 9th grade education: 4, 5, 7, 8. Overall poverty rate: 1, 2, 10, 11. Median family income: 51, 50, 48, 42. Per-capita income: 50, 49, 45, 40. Changes in real income between 1979 and 1989: 51, 49, 48, 42. Expenditures per pupil in elementary and secondary schools: 50, 49, 46, 44. Adults who completed high school: 45, 43, 41, 39. Adults who completed college: 43, 42, 40, 36.
So, next time a pundit extols our good fortune on “Tax Freedom” day, head to your nearest library (assuming it remains open and can afford the subscriptions) and check “state rankings” and “statistical abstracts of the United States.” What you discover may temper your celebration.
Wayne Flynt is Distinguished University Professor Emeritus at Auburn University.