Those evaluating the Kansas fiscal “experiment” should consider what is the relevant input variable.
An experiment implies changing inputs (one or more independent variables) and examining outputs (dependent variables). If we are to consider the Kansas budget an experiment — and I’m not sure that analogy is apt — what is the independent variable? Is it tax revenue collected, or government spending?
If we believe the purpose of taxation is to pay for spending, then the independent variable is the level of spending. As can be seen in the nearby table and chart, Kansas spending has risen in recent years. Perhaps it has not risen as fast as some people want. Also, these numbers are not adjusted for inflation (which has been low).
But to conclude the “experiment” is a failure because tax revenue is lower is not looking at the right input variable. We should be looking at spending, which keeps going up.
In this episode of WichitaLiberty.TV: Do Wichita’s many laws and regulations accomplish their goals? Then, are Wichita’s economic development policies likely to work? Episode 98, broadcast October 18, 2015. View below, or click here to view in high definition at YouTube.
In this paper, we begin with a critical overview of two of the most commonly used strategies to promote entrepreneurship: creating public venture funds and business incubators. We then explain that these strategies often neglect an essential principle: connectivity and learning by entrepreneurs. Next, we describe ways in which public venture funds and incubators can be reorganized based on the connectivity principle before concluding with several other recommendations for how cities and states can promote entrepreneurship and begin to see real results that transform economies and provide new opportunities to residents.
Jeffrey A. Tucker, Director of Digital Development at the Foundation for Economic Education, talks about his new book, “Bit by Bit: How P2P Is Freeing the World.” The book is an explanation of how Bitcoin type cryptocurrencies work as a “peer to peer” innovative payment network and an alternative exchange system. Tucker gave the presentation October 2, 2015, at the Wichita Pachyderm Club. View below, or click here to view in high definition at YouTube. Videography by Paul Soutar.
In this episode of WichitaLiberty.TV: Jeffrey Tucker talks about his most recent book “Bit by Bit: How P2P Is Freeing the World” and how Bitcoin and other distributed technologies are affecting the world. View below, or click here to watch in high definition at YouTube. Episode 97, broadcast October 4, 2015.
States with higher rates of economic growth grow total charitable giving at a faster rate than states with low rates of economic growth, finds a new report by American Legislative Exchange Council.
From ALEC: Charity is a crucial component of efforts to address societal challenges and help individuals thrive. From religious organizations to community charities, philanthropic donations drive the institutions of civil society and enable communities to develop around a greater sense of shared purpose. Despite this important role, charitable giving is rarely addressed in discussions around public policy — especially state tax policy.
The report uses data collected from the Internal Revenue Service (IRS) and focuses on both the levels of charitable giving and the growth of charitable giving throughout the states. We examined these trends over two different time periods. First, the IRS data begins in 1997 and is available through 2012. Second, we measured state charitable giving from 2008 to 2012 to understand how states fared during the recession.
Here are some of the most significant findings from our report:
States with higher taxes generally experienced lower levels and lower rates of growth in charitable giving compared with their lower tax counterparts
A one percent increase in a state’s total tax burden is associated with a 1.16 percent decrease in the state’s rate of charitable giving
A one percent increase in a state’s personal income tax burden is associated with a 0.35 percent decrease in the state’s rate of charitable giving as a percent of total state income
In every category, over each time period, the nine states without income taxes grew their rates of charitable giving more than the nine states with the highest income taxes
An often overlooked aspect of public policy is the role that charitable organizations have in addressing some of society’s most pressing concerns. Because of this important role and since charitable organizations are funded privately through donations, understanding how state policies interact with charitable organizations is crucial for a robust discussion about public policy. This State Factor examines state tax policies that encourage charitable giving, apart from the charitable giving deduction.
While many factors certainly influence an individual’s choice about donating to charity, there are broad policy choices that can encourage higher rates of growth in charitable giving. By examining various tax burdens and tax rates with rigorous economic analysis, this paper’s research findings show that a 1 percent increase in the personal income tax burden is associated with 0.35 percent decrease in charitable giving per dollar of state income. Similarly, this State Factor found that an increase in personal income tax burden of roughly 1 percentage point of total state income results in a roughly 0.10 percentage point decrease in the level of measured charitable donations as a percent of income.
When all state taxes are considered, a 1 percentage point increase in the total tax burden is associated with a 1.16 percent drop in charitable giving per dollar of state income. Similarly, this State Factor found that an increase in total tax burden of roughly 1 percentage point of total state income results in a roughly 0.09 percentage point decrease in the level measured charitable donations as a percent of income.
According to the new report, The Effect of State Taxes on Charitable Giving the following states donated the most to charity as a percent of total income between 1997 and 2012, in order from 1st to 10th: Utah, Wyoming, Georgia, Alabama, Oklahoma, South Carolina, Maryland, Idaho, North Carolina and Mississippi. The report examines patterns of philanthropic contributions in the states over time and uses rigorous economic analyses to draw significant conclusions about charitable giving in the United States.
The report is written by Jonathan Williams, William Freeland, research analyst for the ALEC Center for State Fiscal Reform, and Ben Wilterdink, research manager for the ALEC Center for State Fiscal Reform. The report reveals that states with higher rates of economic growth grow total charitable giving at a faster rate than states with low rates of economic growth.
Here is an interactive visualization of private nonfarm employment in Kansas, for each county. Data is from Bureau of Economic Analysis, part of the U.S. Department of Commerce. Click here to open the visualization.
The sample below shows job growth for the state as a whole, along with the five largest counties. Click it for a larger version.
“For Austrians, on the other hand, man is a purposeful being. … He has spirit and will.” The author of these remarks, Dr. Richard Ebeling, delivered a lecture on Austrian Economics to an audience in Wichita.
Austrian Economics focuses on man as a human actor, rather than as a cog in a system of equations. Dr. Richard Ebeling delivered an introductory lecture on Austrian Economics to an audience in Wichita on September 10, 2015.
A companion article to the lecture is Austrian Economics and the Political Economy of Freedom, in which Dr. Ebeling explains: “The Austrian view of man refutes the positivist, historicist, and neoclassical conceptions of man as a mere physical, quantitative object, or as a passive subject controlled by the dark forces of history, or as a ‘dependent variable’ in a system of mathematical equations. … For Austrians, on the other hand, man is a purposeful being. He thinks, plans, and acts. Man may be made up of matter, but he possesses consciousness. He has the capacity to imagine, create, and initiate. His mind is not simply reducible to lifeless matter. He has spirit and will.”
View video of the lecture below, or click here to view at YouTube in high definition (recommended). Videography by Paul Soutar.
Voice for Liberty presents Richard M. Ebeling, Ph.D. for an informative breakfast event. Ebeling is BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. His topic will be “An Introduction to Austrian Economics.”
Richard M. Ebeling, Ph.D.This meeting is Thursday September 10, 2015, from 7:30 am to 9:00 am. It will be at the Petroleum Club, 9th floor of the Ruffin Building at 100 N. Broadway in Wichita.
The cost is $15, which includes a delicious breakfast. RSVP is not required, but if you plan to attend, would you please let me know by email at bob.weeks@gmail.com? This will help with planning. But please attend even if you can’t RSVP.
About the speaker
Dr. Richard M. Ebeling is the recently appointed BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel. He will be conducting courses such as “Leadership, Entrepreneurship, and Capitalist Ethics” as well as “The Morality and Economics of Capitalist Society.” Dr. Ebeling is recognized as one of the leading members of the Austrian School of Economics and the author of Political Economy, Public Policy, and Monetary Economics: Ludwig von Mises and the Austrian Tradition (Routledge 2010). He is currently editing a forthcoming volume in the Collected Works of F.A. Hayek (Univ. of Chicago Press), the noted Austrian economist and Nobel Laureate. Prior to his appointment at The Citadel, Dr. Ebeling was professor of Economics at Northwood University in Midland, Michigan (2009-2014). He served as president of the Foundation for Economic Education (2003-2008), was the Ludwig von Mises Professor of Economics at Hillside College in Hillsdale, Michigan (1988-2003), and Assistant Professor of Economics at the University of Dallas in Texas (1984-1988). He lives with his wife Anna and their dog “Fritzie” in Mt. Pleasant, South Carolina.
The Austrian view of man refutes the positivist, historicist, and neoclassical conceptions of man as a mere physical, quantitative object, or as a passive subject controlled by the dark forces of history, or as a “dependent variable” in a system of mathematical equations. Positivism tried to reduce man and his mind to mere magnitudes to be studied and manipulated like the inanimate matter experimented on in the natural sciences. Historicism claimed that man is determined and molded by external laws of history that shape his thoughts, actions, and destiny, with little latitude for the individual to design and guide his own future. Neoclassical economics treats man like a mathematical function possessing given tastes and preferences, which are themselves induced by his surroundings and on the basis of which he responds in predictable ways when confronted with various constraining and objective tradeoffs in the form of market prices.
For Austrians, on the other hand, man is a purposeful being. He thinks, plans, and acts. Man may be made up of matter, but he possesses consciousness. He has the capacity to imagine, create, and initiate. His mind is not simply reducible to lifeless matter. He has spirit and will. Man reflects on the circumstances in which he finds himself. He judges aspects of his physical and social surroundings less than satisfactory. He imagines states of affairs that would be more to his liking. He creates in his mind plans of action that would bring those preferred states of affairs into existence. He discovers that the things he can use as means to achieve some of his ends are insufficient to achieve all of his ends. He has to weigh the alternatives and decide which he prefers more, since some of them, in the face of scarcity, will have be forgone today or forever. He therefore has to decide the tradeoffs he is willing to make, and as a result he determines the costs of his own choices in the form of goals he is willing to give up in order to pursue others that he considers more important.
An experiment implies changing inputs (one or more independent variables) and examining outputs (dependent variables). If we are to consider the Kansas budget an experiment — and I’m not sure that analogy is apt — what is the independent variable? Is it tax revenue collected, or government spending?
