Voice For Liberty

Category: Taxation

  • State Tax Collections

    State Tax Collections

    Using data from Tax Foundation, I examined state political sentiment and state tax collections.

    One way to measure the political sentiment of a state is the proportion voting for Donald J. Trump. The Tax Foundation provides data on the total value of state government tax collections, and also per capita (state residents). This data is for fiscal year 2023.

    I plotted the data, using Trump vote as an independent variable shown on the horizontal axis, and tax collections per resident on the vertical axis. The size of the marks is proportional to the state population. (click for larger)

    I asked ChatGPT to perform a regression analysis and explain the results. I also included the state population as an independent variable. Following is a short summary of findings:

    This analysis looked at whether two factors — how strongly a state voted for Donald Trump in 2020 and the state’s total population — help explain differences in how much tax the state collects per person. We found that states with higher Trump vote shares tend to collect less in taxes per resident on average. The population of the state didn’t show a clear or consistent effect on tax collections per resident. Overall, these two factors together explain roughly one-quarter of the differences in how much states collect in taxes per person, meaning many other factors also matter.

    In more detail:

    Residuals:
     Min       1Q   Median       3Q      Max 
-2681.42  -985.63    42.02  1016.91  2686.93 

Coefficients:
               Estimate Std. Error t value Pr(>|t|)    
(Intercept)     7857.18    924.98   8.49  1.06e-11 ***
x             -6139.42   1657.40  -3.70  0.00061 ***
size_values       -0.00      0.00  -1.65  0.10600    
---
Signif. codes:  0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1

Residual standard error: 1398 on 47 degrees of freedom
Multiple R-squared: 0.236,  Adjusted R-squared: 0.203 
F-statistic: 7.258 on 2 and 47 DF,  p-value: 0.00179

    Key Points:

    1. Intercept (7857.18)
      • Interpreted as the expected tax collections per resident when both the Trump vote share (x) is 0 and the population (size_values) is 0.
      • Although literal interpretation of “population = 0 and Trump vote share = 0” doesn’t make practical sense for real states, the intercept is still the baseline from which changes in x or size_values start.
    2. Coefficient for x (-6139.42)
      • This is a strong negative relationship with the dependent variable (y), statistically significant at well below the 1% level (p < 0.01).
      • Because x ranges between 0 and 1 (representing 0% to 100% of the Trump vote share in a state), a difference of 0.10 (i.e., 10 percentage points in Trump vote share) would, all else equal, correspond to a decrease of about 614 dollars of tax collections per resident (-6139.42 * 0.10).
      • In other words, states with higher Trump vote shares tend to have lower state tax collections per resident, all else being equal.
    3. Coefficient for size_values (-0.0000369)
      • The effect of population is negative but not statistically significant at the 5% level (p ? 0.106).
      • That means we do not have strong evidence that population size on its own (once we also include x in the model) clearly predicts higher or lower per-resident tax collections. It might be mildly negative, but the data aren’t conclusive enough to confirm.
    4. Model Fit (R-squared = 0.236)
      • About 23.6% of the variation in state tax collections per resident is explained by these two variables combined.
      • This is a modest amount, indicating that while there is some relationship, other factors also play a significant role in determining state tax collections per resident.
    5. Overall Model Significance (p = 0.00179)
      • Jointly, the two predictors (x and size_values) are statistically significant in explaining variation in y.
      • Within the model, the Trump vote share is strongly significant, while population is not as definitive.
  • Total State Taxes

    Total State Taxes

    Total State Taxes
    Dollars per resident, adjusted for inflation. State taxes only. (more…)

  • Kansas State Government Tax Collections for 2021

    Kansas State Government Tax Collections for 2021

    Kansas state government tax collections rose to $3,958 per person in 2021, an increase of 14.9 percent from 2020, and of 9.2 percent from 2019. (more…)

  • Taxation in the States

    Taxation in the States

    How does taxation differ in the states? There can be large differences. (more…)

  • Wichita property tax on commercial property: High

    Wichita property tax on commercial property: High

    An ongoing study reports that property taxes on commercial and industrial property in Wichita are high. In particular, taxes on commercial property in Wichita are among the highest in the nation.

    Click for larger.

    The study is produced by Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence. It’s titled “50 State Property Tax Comparison Study” and may be read here. It uses a variety of residential, apartment, commercial, and industrial property scenarios to analyze the nature of property taxation across the country. I’ve gathered data from selected tables for Wichita.

    In Kansas, residential property is assessed at 11.5 percent of its appraised value. Commercial property is assessed at 25 percent of appraised value, and public utility property at 33 percent. (Appraised value is the market value as determined by the assessor. Assessed value is multiplied by the mill levy rates of taxing jurisdictions to compute tax.)

    This means that commercial property faces 2.104 times the property tax rate as residential property, according to this study. (1)The ratio of 25 to 11.5 is 2.174, so some small factors have a role. The U.S. average is 1.713. Whether higher assessment ratios on commercial property as compared to residential property is desirable public policy is a subject for debate. But because Wichita’s ratio is high, it leads to high property taxes on commercial property.

    For residential property taxes, Wichita ranks below the national average. For a property valued at $150,000, the effective property tax rate in Wichita is 1.19 percent, while the national average is 1.34 percent. The results for a $300,000 property were similar.

    Of note is the property taxes on a median-valued home. In this case, Wichita is a bargain, due to our lower housing prices. A home at the median value in Wichita pays $1,655 in taxes, while the nationwide average is $4,562. (The median home value in Wichita is $139,800 and for the nation, $326,392, according to this report.)

    Looking at commercial property, Wichita taxes are high. For example, for a $100,000 valued property, the study found that the national average for property tax is $2,206 or 1.84 percent of the property value. For Wichita the corresponding values are $3,229 or 2.69 percent, ranking seventh-highest among the 50 largest cities. Wichita property taxes are 46 percent higher than the national average, for this scenario.

    For industrial property taxes, the situation in Wichita is better, with Wichita ranking near the middle of the 50 largest cities. For an industrial property worth $1,000,000, taxes in Wichita are $29,372. The national average is $30,498.

    References

    References
    ↑1The ratio of 25 to 11.5 is 2.174, so some small factors have a role.

  • Wichita property tax still high on commercial property

    Wichita property tax still high on commercial property

    An ongoing study reports that property taxes on commercial and industrial property in Wichita are high. In particular, taxes on commercial property in Wichita are among the highest in the nation.

    Click for larger.
    The study is produced by Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence. It’s titled “50 State Property Tax Comparison Study, June 2017” and may be read here. It uses a variety of residential, apartment, commercial, and industrial property scenarios to analyze the nature of property taxation across the country. I’ve gathered data from selected tables for Wichita.

    In Kansas, residential property is assessed at 11.5 percent of its appraised value. Commercial property is assessed at 25 percent of appraised value, and public utility property at 33 percent. (Appraised value is the market value as determined by the assessor. Assessed value is multiplied by the mill levy rates of taxing jurisdictions to compute tax.)

    This means that commercial property faces 2.18 times the property tax rate as residential property. The U.S. average is 1.67. Whether higher assessment ratios on commercial property as compared to residential property is desirable public policy is a subject for debate. But because Wichita’s ratio is high, it leads to high property taxes on commercial property.

    For residential property taxes, Wichita ranks below the national average. For a property valued at $150,000, the effective property tax rate in Wichita is 1.22 percent, while the national average is 1.39 percent. The results for a $300,000 property were similar.

    Of note is the property taxes on a median-valued home. In this case Wichita is a bargain, due to our lower housing prices. A home at the median value in Wichita pays $1,513 in taxes, while the nationwide average is $3,343. (The median home value in Wichita is $124,400, and for the nation, $262,772, according to this report.)

    Looking at commercial property, Wichita taxes are high. For example, for a $100,000 valued property, the study found that the national average for property tax is $2,319 or 1.93 percent of the property value. For Wichita the corresponding values are $3,261 or 2.72 percent, ranking ninth highest among the 50 largest cities. Wichita property taxes are 41 percent higher than the national average, for this scenario.

    For industrial property taxes, the situation in Wichita is better, with Wichita ranking near the middle of the 50 largest cities. For an industrial property worth $1,000,000, taxes in Wichita are $29,681. The national average is $32,264.

  • Tax collections by the states

    An interactive visualization of tax collections by state governments.

    Each year the United States Census Bureau collects data from the states regarding tax collections in various categories. I present this data in an interactive visualization.

    The values are for tax collections by the state only, not local governmental entities like cities, counties, townships, improvement districts, cemetery districts, library districts, drainage districts, watershed districts, and school districts.

    Of particular interest is the “Total by State” tab. Here you can select a number of states and compare their tax burdens. (Probably three or four states at a time is the practical limit.) This data is presented on a per-person basis.

    From this data we can see a number of valuable comparisons. For example, it is often said in Kansas that we can’t eliminate our income tax as has Texas, because we don’t have as much oil severance tax revenue. From the data we see that Texas collected $84 per person in severance tax, while Kansas collected $17 per person. This difference is much smaller than the difference in total tax collections between these states.

    Similarly, when comparing Kansas to Florida — which like Texas has no income tax — the large amount of tourism in Florida is said to generate enough revenue to allow zero income tax. But, in 2016 Florida collected $1,081 per person in sales tax, while Kansas collected $1,115 per person. Florida does not collect sales tax on groceries, so it may be that visitors pay more of the sales tax burden. But, Kansas still collects more sales tax on a per-capita basis, and Kansas collects much more tax in total than Florida, again on a per-capita basis.

    Data is as collected from the United States Census Bureau, Annual Survey of State Government Tax Collections, and not adjusted for inflation. Visualization created using Tableau Public. Click here to access the visualization.

    Example from the visualization. Click for larger.
  • Kansas cigarette tax collections

    Kansas cigarette tax collections

    Effective July 1, 2015, the tax on cigarettes in Kansas rose by $0.50 per pack, going from $0.79 to $1.29 per pack. For the three years prior to that date cigarette tax collections averaged about $7.5 million per month. Since then collections has averaged about $11.1 million per month. But, as the chart shows, the trend is down. For February 2017 collections were $8.7 million, almost exactly the same as the month before the tax hike took effect.

    Click for larger.
  • Tax collections by the states

    Tax collections by the states

    An interactive visualization of tax collections by state governments.

    Note: this visualization has been updated. Click here for the most recent version.

    Each year the United States Census Bureau collects data from the states regarding tax collections in various categories. I present this data in an interactive visualization.

    The values are for tax collections by the state only, not local governmental entities like cities, counties, townships, improvement districts, cemetery districts, library districts, drainage districts, watershed districts, and school districts.

    Of particular interest is the “State Total” tab. Here you can select a number of states and compare their tax burdens. (Probably three or four states at a time is the practical limit.) This data is presented on a per-person basis.

    The example shown below compares Kansas and Colorado. Many might be surprised to know that tax collections in Kansas are higher than in Colorado, on a per-person basis.

    Data is as collected from the United States Census Bureau, Annual Survey of State Government Tax Collections, and not adjusted for inflation. Visualization created using Tableau Public. Click here to access the visualization.

    An example from the visualization, comparing Colorado and Kansas state tax collections per capita. Click for larger.