State Tax Data Running Flat

Contra Corner reports:

Only a few weeks ago, Pew Charitable Trusts noted that 26 states still have not re-attained their pre-cycle peaks in “revenue.” And for those that have reached fully recovered, the new peak is often attributable to increases in legislation and tax rates rather than simply growth in economic activity.

That rates as the structural side of the problem, as it has been clear for some time that growth on this upslope of the cycle is “mysteriously” depressed by any relevant measure, especially historical experience. In addition to that, coincident to many other hard $ indications, there is a growing sense of a cyclical element or inflection.

According to the Rockefeller Institute of Government, state tax receipts are running very low so far this year. Overall tax receipts for 46 states show no growth (+0.7%) in the first uater – the lowest increase since the end of 2009. That is due to depressed levels of sales taxes and personal income taxes.

On the sales tax side, most directly related to economic condition, growth in the first quarter was the lowest since the first quarter of 2010.

The failure of Keynesian economics.