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November 2, 2001

National taxpayers' group features Institute analysis of state and local tax burdens

A prominent national taxpayers' group is showcasing analysis from The Public Policy Institute to show how differing state and local tax burdens affect the competitiveness of individual states.

Robert B. Ward, director of research for The Institute, discussed these issues in June at the annual National Taxpayers Conference, sponsored by the National Taxpayers Union. He then wrote an article summarizing his analysis fot the September/October issue of Capital Ideas, an NTU publication.

Federal tax cuts enacted earlier this year "represent an important victory for taxpayers," Ward wrote. However, he added, "there's a real danger that state and local governments will soak up much of your savings."

Ward's presentation and paper summarize his analysis of Census Bureau data on state and local taxes collected in all 50 states. All told, those taxes amounted to more than $815 billion in fiscal year 1999 - "as much as Washington collected through the Social Security tax, the corporate income tax, and the estate tax combined," Ward wrote.

The 1999 figure was 5.4 percent higher than the prevous year, an increase of more than twice the inflation rate, Ward noted. "That adds up to a $25 billion grab from the taxpayers, compared to what government needed to keep pace with the overall cost of goods and services," he wrote.

When tax collections are adjusted for relative income, New York's combined state and local taxes are the nation's highest, at 14 percent of personal income, Ward's analysis shows.

Ward encouraged taxpayers' advocates to acquaint themselves with their states' data and communicate the results of their own analyses with journalists, elected officials, and citizens.

"Elected officials hear from hundreds of pro-spending voices for every single taxpayers' advocate who visits or writes a letter," he said. "Finding the facts about taxing and spending, and putting them to good use, can make all the difference."