The Carolina Cage Match: Peter Shumlin Versus Rational Public Policy

Having recently moved my waffle franchise south to a place the locals here call “North Carolina”, I thought it would be interesting to perform

Don't worry, ShumlinCare covers dental reconstruction.  With a $10,000 deductible.

Don’t worry, ShumlinCare covers dental reconstruction. With a $10,000 deductible.

that most agonizing of middle-school tasks: Compare and Contrast.  But to make it more interesting – and possibly more telling, we’re going to give the C&C treatment to the economies of Vermont and North Carolina. I’m picturing this as kind of a Goofus and Gallant deconstruction of public policy.  If  you happen to assume that Peter Shumlin is the Goofus in this scenario, well, that’s up to you.

A Quick Tax Policy Comparison:

North Carolina:  In 2014, North Carolina recently dropped its income tax rate, and completely flat-lined it. Where they had three brackets before (ranging from 6.0 to 7.75 percent), there is now one single rate of 5.75% on all income levels (actually down .05% from 5.8% in 2014; is there no end to this tax rate reduction madness?).

Vermont:  In 2014, and now in 2015, the governor’s office and the state legislature seem to spend the bulk of their time trying to find new things to tax, and to scratch their heads as to why income tax revenues are not matching the governor’s rosy budget outlooks.  In August of 2014, two months after the state’s budget was passed, the legislature was called back into session to cut the budget they had just said was needed for Vermont’s economic well being.

Pat McCrory, governor of North Carolina, just submitted his 2015-2017 budget.  The overview says a lot about what’s different between the two states:

No tax increases?  Gasp!

No tax increases? Gasp!

This is somewhat different than Shumlin’s plans for 2015 (at least as of December 2014):

The Shumlin administration has already announced that property taxes are set to rise by 2 cents to $1.00 per $100 of assessed value for homeowners and $1.54 for non-residential properties in 2015. And, Speaker of the House, Shap Smith has indicated that he would like to shift more of the $1.5 billion education budget onto the income tax as part of education finance reform.

Also on the front burner for the 2015 legislative session is a $250 million carbon tax, which would translate into a 45¢ to $1.35 tax on every gallon of gasoline, and something similar for home heating fuel.

In every instance, the only solution is more cowbell, er, taxes.  North Carolina is cutting specific taxes on income, gasoline, etc – the taxes that most directly impact the taxpayers’ bottom lines.

What’s Vermont doing?  The opposite.  And has been, for a long time, with Shumlin doubling down on the same policies that are both bankrupting Vermonters and the state.  A quick snapshot shows the difference between Goofus and Gallant:

Vermont tax rates at a glance:

Look at those glorious job-creating rates shine!

Look at those glorious job-creating rates shine!

North Carolina tax rates at a glance:

There's a reason people move here.

There’s a reason people move here.

Change in unemployment rate from March 2014 to March 2015 (hint:  Vermont’s change is statistically insignificant):


A 1% decrease versus a 0% change.  Hmm.  More cowbell, then?

A 1% decrease versus a 0% change. Hmm. More cowbell, then?

Finally, let’s take a quick look at state spending, by category, and per capita (strap in):

Vermont at a glance:


Vermont Spending dollars and percent

North Carolina at a glance:

NC Spending dollars and percent

Finally, let’s look at the net result of these policies, in terms of job growth.  From January 2014 to January 2015, Vermont’s total employment gain was 1.3%.  North Carolina’s?  2.6%.

At least Vermont got the hard work done on determining the appropriate levels at which to tax soda, though.  So that's something.

At least Vermont got the hard work done on determining the appropriate levels at which to tax soda, though. So that’s something.

Because Shumlin has clearly demonstrated he has trouble with math (unless he’s happily underpaying a neighbor to buy his property without

That's ok, Lois - neither is Vermont's governor.

That’s ok, Lois – neither is Vermont’s governor.

advising said neighbor that he could have gotten relief on his outstanding property tax bill due to his income level, but I digress), I’ll clarify this for him:

North Carolina is doing better than Vermont.  By some numbers, North Carolina is doing twice as good as Vermont is, in terms of creating jobs.  Jobs are what provide tax revenues, not soda purchases.

But when you spend most of your life under a dome that is golden, you don’t really need to see or even try to understand what’s going on outside of the box you’ve happily put yourself into.  Because to do so would point out, at klaxon-alarm-levels of loudness, that you’re killing Vermont’s economy, and with it, the livelihood of all Vermonters.




One thought on “The Carolina Cage Match: Peter Shumlin Versus Rational Public Policy

  1. Nicely written and full of facts. Not many people understand that the laffer curve really is applicable in real life situations. Most recently, some states and municipalities have cranked up cigarette taxes and budgeted for a substantial increase in tax revenue. They assumed the demand was inelastic with regard to a change in price. While they might be right, the didn’t account for the fact that NO ONE wants to pay taxes. What happened is a large increase in illegal importing of cigarettes (increasing organized crime), substitutes including ecigarettes, and going across state borders to buy a cartons at a time to save money. So they had huge shortfalls. (search for “a laffer curve for smokes wsj”).

    Even JFK appreciated that lowering taxes would stimulate the economy and therefore increase tax revenue in the long run. Some have recently argued that he might have been a republican if he were in politics today.

    So the opposite of this approach would be tax and spend, which you’ve outlined above as Vermont’s unfortunate chosen path. That approach leads me to believe that they either don’t understand economics, or they are purposefully choosing to keep jobs and development out of vermont so people can focus on skiing, maple syrup and leaves. Either way it’s a pity the people there continue to elect politicians whose actions are a detriment to the state, and those elected are so misguided in their goals and/or approach.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s