Utah’s Economic Exceptionalism(americanaffairsjournal.org)
americanaffairsjournal.org
Utah’s Economic Exceptionalism
https://americanaffairsjournal.org/2020/11/utahs-economic-exceptionalism/
54 comments
If there is a distrust in government misusing taxes, i wonder why the solution is to have less taxes, as opposed to fixing the government? I'm not being snarky I'm just genuinely curious why that is the knee jerk reaction.
>If there is a distrust in government misusing taxes, i wonder why the solution is to have less taxes, as opposed to fixing the government?
Because it's a lot easier to reduce taxes (simply change tax law) than to fix the government? Especially if the government is corrupt, and wouldn't take too kindly to people trying to "fix" it.
Because it's a lot easier to reduce taxes (simply change tax law) than to fix the government? Especially if the government is corrupt, and wouldn't take too kindly to people trying to "fix" it.
If the government is corrupt, I interpret that as they're there for money and power(often in the form of how to spend the money), why is it is easier to get rid of the reason to be in a corrupt government than to change some of the members of said government? Feels like it'd be of comparable difficulty.
Who’s to say that cutting taxes isn’t the best route to fixing the government.
When institutions are systematically overfunded they tend to grow fat and entitled. Ironically they end up doing less with more. Trimming the budget enforces discipline and builds institutional knowledge around how to operate lean and execute efficiently.
When institutions are systematically overfunded they tend to grow fat and entitled. Ironically they end up doing less with more. Trimming the budget enforces discipline and builds institutional knowledge around how to operate lean and execute efficiently.
This doesn’t happen with business so why do you think it works with government? Do cash strapped companies routinely outperform their well funded competition? No, generally they get acquired or go under.
Fixing the government isn’t a ‘solution’.
It’s a generally unsolved problem.
It’s a generally unsolved problem.
It's a problem that is solved much better in many other similarly-wealthy countries (see Norway, Switzerland) or pretty much all the other first world countries.
It does not have to be perfect, it only has to be better.
It does not have to be perfect, it only has to be better.
Most of those countries have very homogenous populations. You also don’t hear about the bad stuff because unliked the United States they don’t have their dirty laundry being broadcast across every available medium 24/7/365.
[deleted]
How about Singapore?
It's a small city state that's 74% Chinese [1]. Not very multi-cultural in the western sense. Take a look at France for example.
[1] https://en.wikipedia.org/wiki/Demographics_of_Singapore
-edit-
You can also be multi-cultural in the "look at my skin color sense" but not multi-cultural in your beliefs. And of course for the purposes of this discussion it's a matter of degrees. Locally there may be extremes, but when you compare different geographies that might highlight actual extremes. I'm willing to bet, for example, that the United States is far more diverse both in opinion and nationality than Singapore. Iceland? Less so.
[1] https://en.wikipedia.org/wiki/Demographics_of_Singapore
-edit-
You can also be multi-cultural in the "look at my skin color sense" but not multi-cultural in your beliefs. And of course for the purposes of this discussion it's a matter of degrees. Locally there may be extremes, but when you compare different geographies that might highlight actual extremes. I'm willing to bet, for example, that the United States is far more diverse both in opinion and nationality than Singapore. Iceland? Less so.
What are you getting at? How is having homogeneous population causes less corruption in government? There are many asian and african countries with homogeneous population that are extremely corrupt.
Other countries do have 24/7 TV channels and other media.
Other countries do have 24/7 TV channels and other media.
I think the assessment should be paired variables of homogeneous populations AND small populations, since countries in Asia and Africa are counter examples, however, Denmark and other countries touted as good examples are both homogeneous and small in population compared to the US.
> Other countries do have 24/7 TV channels and other media.
Yea and they spend most of that time complaining about Trump. And if they aren't, then people will go to Reddit, or some social media site to do it.
> What are you getting at?
Countries with small, homogeneous populations are going to tend to be less corrupt and better governed. It's more difficult to be a jackass in Iceland than it is in Brasil.
Yea and they spend most of that time complaining about Trump. And if they aren't, then people will go to Reddit, or some social media site to do it.
> What are you getting at?
Countries with small, homogeneous populations are going to tend to be less corrupt and better governed. It's more difficult to be a jackass in Iceland than it is in Brasil.
It's a good answer to the question though. The comment isn't necessarily in support of low taxes, but you have to admit "did I pay less tax?" is much easier to answer than "is the government functioning well?"
The problem is not solved by answering the question ‘does any country appear to have a better government?’.
The problem is solved by answering the question: ‘what mechanism will transform our current government to a better one?’
That is unsolved.
The problem is solved by answering the question: ‘what mechanism will transform our current government to a better one?’
That is unsolved.
Aren’t taxes quite low in Switzerland? Or at least in some Cantons?
There's a major ideological divide over whether fixing the government is possible.
I worked in government for 5 years. I don't think it can be fixed.
Swap government with "big monopolistic corporation" and it begins to make sense why reform of large human organizations while not impossible, is an uphill battle.
It's a good question, and much of it comes from this: most people don't agree on what the government should do with taxes, especially at the detailed implementation level. Also, as you tax people, well, freedom isn't very useful without the financial means to exercise said freedom.
> One article isn't a showstopper, but I really wish this didn't surprise people so much.
It is surprising because given the rest of the "Red" states' records, Utah is an outlier:
> Eighteen of the 19 poorest states have legislatures where both chambers are Republican controlled. New Mexico (46th richest, fifth poorest) is Democratic. But there isn’t another blue or purple state until you get to purple Maine (31st richest, 20th poorest) with its “split” legislature of one party in each chamber. All the states in between (such as Tennessee and Florida) are Republican, both chambers. So is Michigan, where Republicans hold all high state offices (where Donald Trump won in 2016). Above New Mexico, you jump all the way to middle of the pack Vermont (27th richest, 24th poorest) to find a state with both legislative chambers held by Democrats.
> But all five richest states have both legislative chambers controlled by Democrats – Maryland, New Jersey, Hawaii, Massachusetts and Connecticut. Overall, Democrats dominate the 20 richest states.
* https://www.usatoday.com/story/money/columnist/2018/10/21/mi...
> The people have had the resources they would use to deal with it diverted. Low tax scenarios are much more fault tolerant. High taxes won't necessarily promote equality or great outcomes.
When there are haves and have-nots, often expressed in (e.g.) a high Gini coefficient, things generally do not improve for the have-nots over time. As the 20th century has shown, especially in the post-Gilded Age post-WW2 era, taxing to fund social programs tends to improve a society in many ways.
It is surprising because given the rest of the "Red" states' records, Utah is an outlier:
> Eighteen of the 19 poorest states have legislatures where both chambers are Republican controlled. New Mexico (46th richest, fifth poorest) is Democratic. But there isn’t another blue or purple state until you get to purple Maine (31st richest, 20th poorest) with its “split” legislature of one party in each chamber. All the states in between (such as Tennessee and Florida) are Republican, both chambers. So is Michigan, where Republicans hold all high state offices (where Donald Trump won in 2016). Above New Mexico, you jump all the way to middle of the pack Vermont (27th richest, 24th poorest) to find a state with both legislative chambers held by Democrats.
> But all five richest states have both legislative chambers controlled by Democrats – Maryland, New Jersey, Hawaii, Massachusetts and Connecticut. Overall, Democrats dominate the 20 richest states.
* https://www.usatoday.com/story/money/columnist/2018/10/21/mi...
> The people have had the resources they would use to deal with it diverted. Low tax scenarios are much more fault tolerant. High taxes won't necessarily promote equality or great outcomes.
When there are haves and have-nots, often expressed in (e.g.) a high Gini coefficient, things generally do not improve for the have-nots over time. As the 20th century has shown, especially in the post-Gilded Age post-WW2 era, taxing to fund social programs tends to improve a society in many ways.
I think you mixing up cause and effect. Rich states tend to vote Democratic. It’s not that Democratic states lead to wealth.
California was a red state until 1992.
California was a red state until 1992.
> Rich states tend to vote Democratic. It’s not that Democratic states lead to wealth.
Drilling down further, it's more about density:
> There's a decisive break between Democratic and Republican support at a population density of 800 persons/per square mile.
* https://www.bloomberg.com/news/articles/2013-04-01/how-the-d...
* https://www.theatlantic.com/ideas/archive/2020/11/2020-elect...
> If you follow the red state trend lines, you can clearly see that any dense, fast-growing cities that emerge in red states will be very likely to vote blue. The few that do already exist already vote blue.
> Red state voters generally prefer low-density housing, prefer to drive cars, and are sensitive to gas prices. Once population density gets to a certain level, behaviors switch: high-density housing is the norm, public transit becomes more common, and gas use (and price sensitivity) drops. Red state values are incompatible with density.
* https://davetroy.medium.com/is-population-density-the-key-to...
Down to the county level, urban centres tend to have more economic activity:
> A similar analysis for last week’s election shows these trends continuing, albeit with a different political outcome. This time, Biden’s winning base in 477 counties encompasses fully 70% of America’s economic activity, while Trump’s losing base of 2,497 counties represents just 29% of the economy. (Votes are still outstanding in 110 mostly low-output counties, and this piece will be updated as new data is reported.)
* https://www.brookings.edu/blog/the-avenue/2020/11/09/biden-v...
Drilling down further, it's more about density:
> There's a decisive break between Democratic and Republican support at a population density of 800 persons/per square mile.
* https://www.bloomberg.com/news/articles/2013-04-01/how-the-d...
* https://www.theatlantic.com/ideas/archive/2020/11/2020-elect...
> If you follow the red state trend lines, you can clearly see that any dense, fast-growing cities that emerge in red states will be very likely to vote blue. The few that do already exist already vote blue.
> Red state voters generally prefer low-density housing, prefer to drive cars, and are sensitive to gas prices. Once population density gets to a certain level, behaviors switch: high-density housing is the norm, public transit becomes more common, and gas use (and price sensitivity) drops. Red state values are incompatible with density.
* https://davetroy.medium.com/is-population-density-the-key-to...
Down to the county level, urban centres tend to have more economic activity:
> A similar analysis for last week’s election shows these trends continuing, albeit with a different political outcome. This time, Biden’s winning base in 477 counties encompasses fully 70% of America’s economic activity, while Trump’s losing base of 2,497 counties represents just 29% of the economy. (Votes are still outstanding in 110 mostly low-output counties, and this piece will be updated as new data is reported.)
* https://www.brookings.edu/blog/the-avenue/2020/11/09/biden-v...
This patently isn’t true (and if it were then the foundation of capitalism as a theory would be broken). Also all the deep south states would do a lot better in Gini co-efficient rankings. So there’s a reason why people evoke surprise when learning Utah has such low income inequality.
The surprise subsides when they learn about the average age of the population (a young population hasn’t had time to accumulate wealth yet). The propensity for large socialist structures in the state (families) also helps.
The surprise subsides when they learn about the average age of the population (a young population hasn’t had time to accumulate wealth yet). The propensity for large socialist structures in the state (families) also helps.
Taxes aren't the issue. It's how people are taxed. Income tax is just one way people are taxed and they aren't the ONLY type of tax on income (despite people using the word tax to mean income tax). We have social security tax, payroll tax, sales tax, capital gains tax, estate tax, property tax, and (maybe possibly a wealth tax in the future). And that's just individual taxes.
People say this all the time and it is false: California is a high tax state. No it isn't. It is a high Income tax state. It is an extremely low property tax state.
To put this in perspective, I live in Boston and my mom lives in California. She owns > $3 million dollars worth of property that she pays 1% tax on when she bought it (for around 500K total) so an effective property tax rate of .16%. In Texas she would be paying 3% property taxes which 1800% percent more. She also gets depreciation on the rental property that is marked up to when some it got transferred to her so she gets depreciation amortized over 18 years at ~2.5 million valuation. She also collects social security, a pension from a previous government job, and rental income. All unearned. Some of the rental income comes from Section 8 and other welfare programs (paid for by young workers). Let alone medicare which she will certainly get way more out than she ever put in.
I on the other hand, make ~190K a year. One year I got lucky with stocks/bitcoin. I've been paying in the 250K income tax bracket for 3/4 years. I've also paid >5% state income taxes every year on that money. I've paid double or triple my mom's taxes every year despite her making total earnings including investments way above me. ON top of that I have high payroll taxes, sales taxes, and no deductions. I live in a crappy apartment (near a bunch of frat houses) that costs 2K a month (a little less than my mom's mortgage on a house worth $1.7 million).
For young people that have no property and income we are in an awful position. All we hear is increase income taxes, but that is the only way we are moving up the socio-economic ladder. We have many types of inequality in the US, but the most extreme is age-related inequality. Older people have almost all the money in America. The largest generation now is the millennials and they hold <10% of US wealth. Millenials are now in their prime working years and income is the primary way they will acquire wealth as they hold almost none of the assets in this country.
Its no wonder that younger and middle class people are flocking to places like Texas where they can afford a house (because property taxes prevent money flooding into real estate), and can actually get ahead because of little to no state income taxes.
People say this all the time and it is false: California is a high tax state. No it isn't. It is a high Income tax state. It is an extremely low property tax state.
To put this in perspective, I live in Boston and my mom lives in California. She owns > $3 million dollars worth of property that she pays 1% tax on when she bought it (for around 500K total) so an effective property tax rate of .16%. In Texas she would be paying 3% property taxes which 1800% percent more. She also gets depreciation on the rental property that is marked up to when some it got transferred to her so she gets depreciation amortized over 18 years at ~2.5 million valuation. She also collects social security, a pension from a previous government job, and rental income. All unearned. Some of the rental income comes from Section 8 and other welfare programs (paid for by young workers). Let alone medicare which she will certainly get way more out than she ever put in.
I on the other hand, make ~190K a year. One year I got lucky with stocks/bitcoin. I've been paying in the 250K income tax bracket for 3/4 years. I've also paid >5% state income taxes every year on that money. I've paid double or triple my mom's taxes every year despite her making total earnings including investments way above me. ON top of that I have high payroll taxes, sales taxes, and no deductions. I live in a crappy apartment (near a bunch of frat houses) that costs 2K a month (a little less than my mom's mortgage on a house worth $1.7 million).
For young people that have no property and income we are in an awful position. All we hear is increase income taxes, but that is the only way we are moving up the socio-economic ladder. We have many types of inequality in the US, but the most extreme is age-related inequality. Older people have almost all the money in America. The largest generation now is the millennials and they hold <10% of US wealth. Millenials are now in their prime working years and income is the primary way they will acquire wealth as they hold almost none of the assets in this country.
Its no wonder that younger and middle class people are flocking to places like Texas where they can afford a house (because property taxes prevent money flooding into real estate), and can actually get ahead because of little to no state income taxes.
I spent a year at a startup that had Utah roots (half the employees came from BYU). The CEO already had an 8 figure exit from a prior company he co-founded.
It was a unique pleasure working there... many small companies tout this, but it really did feel like an extended family. Such an aura of positivity and comraderie really helped morale in the face of a handful of make or break issues we faced during my time.
And despite the obvious roots of the company, not a whiff of anything religious or political was mentioned or hinted at, though people’s personal lives were regularly discussed and shared.
It was a unique pleasure working there... many small companies tout this, but it really did feel like an extended family. Such an aura of positivity and comraderie really helped morale in the face of a handful of make or break issues we faced during my time.
And despite the obvious roots of the company, not a whiff of anything religious or political was mentioned or hinted at, though people’s personal lives were regularly discussed and shared.
Homogeneous. High trust. Purpose and meaning from religion. Conservative family centric values.
This is not surprising at all. I wish more Americans had this, I wish I did.
This is not surprising at all. I wish more Americans had this, I wish I did.
Agree, this should surprise no one. I wish we had a Utah I could move to.
The purpose and meaning only work if you're bought in 100%. The religion is very intolerant of difference of thought. I spent years in it and was never happy.
> Purpose and meaning from religion.
Having been raised in it you're not missing much. And the baggage it comes with far outweighs any benefit.
Having been raised in it you're not missing much. And the baggage it comes with far outweighs any benefit.
Cope
> Importantly, Utah’s success also shows up in health data. Utah’s cumulative case fatality rate—arguably the most important measure of pandemic success—measures 0.63 percent (compared to the national rate of 2.87 percent) and ranks lowest in the nation (as of this writing in October 2020).
What in the world is this saying? That somehow Utahns are less likely to die once they have contracted the virus and that this has something to do with their economic prowess?
Utah currently has a raging pandemic with a test positivity rate of 22% and an ever growing 2000+ people a day being picked up by testing. ICU and hospitalization rates are skyrocketing: https://cv19.report/UT
Utah even sent out a text message to all residents warning them about the problem: https://coronavirus.utah.gov/utah-will-deploy-a-single-wirel...
This doesn’t look like much to brag about.
What in the world is this saying? That somehow Utahns are less likely to die once they have contracted the virus and that this has something to do with their economic prowess?
Utah currently has a raging pandemic with a test positivity rate of 22% and an ever growing 2000+ people a day being picked up by testing. ICU and hospitalization rates are skyrocketing: https://cv19.report/UT
Utah even sent out a text message to all residents warning them about the problem: https://coronavirus.utah.gov/utah-will-deploy-a-single-wirel...
This doesn’t look like much to brag about.
I don’t see a date on the article - maybe it was written before Utah got into its latest surge in cases.
Fatality rates go down when people are tested early and hospitalized early. It seems quite plausible that income equality encourages both, since if you're poor and/or uninsured, going to the hospital or even the doctor is an absolute last resort.
You can say about the Mormon religion whatever you want, but they are fascinating people, and at least from an outsider's point of view their society seems to work pretty well. Living in Europe I have not met many people from Utah in my life, but those young Mormon missionaries that try to talk to you on the street always seem to be very well mannered, friendly people. If they didn't have that strange religion I could actually imagine becoming a mormon :)
Speaking as an exmo: you're correct, but also keep in mind that hiding the hurt and putting on a good face are also part of the religion. There's a reason why the cosmetic surgery billboard ads in Utah are omnipresent, and why anti-depressant usage is so high.
There are absolutely some positive things about the faith, but the darker aspects are not as easily visible.
There are absolutely some positive things about the faith, but the darker aspects are not as easily visible.
This doesn't negate your point, but part of the reason for higher anti-depressant usage is that they are less effective at altitude[0].
[0]https://unews.utah.edu/common-antidepressents-are-less-effec...
[0]https://unews.utah.edu/common-antidepressents-are-less-effec...
I thought the stat on high Utah anti depressant usage was based on the number of people taking them, not dosage levels. Though after a quick googling to check, I still can't tell.
You could say the exact same thing regarding Los Angeles Ca.
Sure but the city of Los Angeles isn't a cult. You're free to criticize the leadership of the city, you're free to move to another city and come back and visit your friends, you're free to think whatever you want.
Society is scratching the surface on toxic power dynamics. Right now we're talking about Mormons.
> and at least from an outsider's point of view their society seems to work pretty well.
Narrator: It doesn't and is heavily subsidized, simultaneously making non-compliance harder to reconcile.
It is impossible to discern if someone is making a satire of their religion, is an actual Mormon, or is an actual Mormon questioning the absurdities of their society.
Narrator: It doesn't and is heavily subsidized, simultaneously making non-compliance harder to reconcile.
It is impossible to discern if someone is making a satire of their religion, is an actual Mormon, or is an actual Mormon questioning the absurdities of their society.
heavily subsidized
Subsidised by whom?
Subsidised by whom?
The families/community and church. Or the church, families/community. It is all interrelated. Hard for people to make other choices that mean being outside of that support system.
Governmental policy is less important then everyone thinks.
Unity and virtue appear to help, in terms of equity.
Utah economics are uniquely tied to mormons. Not sure if that's good or bad but just the fact.
I like this descriptive first hand account of policy work in Utah. Now please explain how to replicate it.
SLC's strategy for homelessness is audacious and progressive. Leftists like me sat up and took note. Why can't we do the same in our own areas?!
Utah reminds me of the Nordic countries, specifically Finland. High homogeneity allows those societies to more easily find consensus, break out of dogmatic strategies that no longer work.
One data point about homogeneity (no cite, sorry) is a study of conservative support for raising taxes. Conservatives in more homogenous areas happily raise their own taxes, at about the same rate as majority liberal areas.
FWIW, Some of Utah's approach to social problems is my kind of conservativism. I grew up in the church. We did the food banks, adopting refugee families, missionary works (rites of passage). Not knowing any better, I thought this was the norm, and that I was a conservative. While I'm not a big fan of Mormonism (or religion in general), I love that society's commitment to mutual aide.
--
Meta: I became interested in American Affairs when Ezra Klein interviewed Julius Krein.
https://www.vox.com/21528267/the-ezra-klein-show-trumpism-do...
https://en.wikipedia.org/wiki/American_Affairs
I love that the next generation of thinkers are reexamining big ideas with fresh eyes, that they're ignoring the framing and battle lines drawn up by Boomers and Gen X'ers (like me).
In my own activism and political participation, I've observed that Millennials (aka Gen Y?) are more interested in getting things done. Much to the consternation to most of us blue hairs. But I love it.
SLC's strategy for homelessness is audacious and progressive. Leftists like me sat up and took note. Why can't we do the same in our own areas?!
Utah reminds me of the Nordic countries, specifically Finland. High homogeneity allows those societies to more easily find consensus, break out of dogmatic strategies that no longer work.
One data point about homogeneity (no cite, sorry) is a study of conservative support for raising taxes. Conservatives in more homogenous areas happily raise their own taxes, at about the same rate as majority liberal areas.
FWIW, Some of Utah's approach to social problems is my kind of conservativism. I grew up in the church. We did the food banks, adopting refugee families, missionary works (rites of passage). Not knowing any better, I thought this was the norm, and that I was a conservative. While I'm not a big fan of Mormonism (or religion in general), I love that society's commitment to mutual aide.
--
Meta: I became interested in American Affairs when Ezra Klein interviewed Julius Krein.
https://www.vox.com/21528267/the-ezra-klein-show-trumpism-do...
https://en.wikipedia.org/wiki/American_Affairs
I love that the next generation of thinkers are reexamining big ideas with fresh eyes, that they're ignoring the framing and battle lines drawn up by Boomers and Gen X'ers (like me).
In my own activism and political participation, I've observed that Millennials (aka Gen Y?) are more interested in getting things done. Much to the consternation to most of us blue hairs. But I love it.
One article isn't a showstopper, but I really wish this didn't surprise people so much.
Taxes are taking away people's surplus (I've often heard 'they don't need the money' come up in arguments about taxes, for example) and invest it in government. That means that if the government fails to do something it is game over. The people have had the resources they would use to deal with it diverted. Low tax scenarios are much more fault tolerant. High taxes won't necessarily promote equality or great outcomes.