In March Mississippi broke it’s streak of lagging sales tax collections. What’s the deal?
Why are Mississippi sales tax revenues and income tax receipts millions below projected levels with unemployment at its lowest level in 15 years? [WTVA report]. It’s a “conundrum” notes Secretary of State Delbert Hosemann.
Democratic State Representative Steve Holland theorizes that people are being extraordinarily conservative in spending their money. But that doesn’t explain the lower than projected income tax collections.
Hosemann theorizes that some people may not be paying their fair share and that people are chronically underemployed. Hosemann is right on both counts.
The problem with unemployment rates is that they don’t tell the story of the chronically underemployed and the underpaid. You can be employed and not making ends meat.
Let’s be honest. The economy sucks. People are house poor and car poor. People are struggling to get by. They may have a job, but they’re struggling.
The stock market is at all time highs. But that doesn’t help the vast majority of people in Mississippi. The beneficiaries of the “financial recovery” since 2008 are the top 1%-ers. For most people there hasn’t been a recovery.
When it comes to the economy I trust my gut. My gut tells me that people are struggling and the economy sucks. There is a better chance that the stock market reverts to the reality on the ground than things start going great economically for most people.
The economic boom of my lifetime was the 1990’s. People weren’t worried about keeping their job. It was easy to get a job—it was easy to get a better job. There was a lot of movement in the workforce. People were buying bigger houses and, most importantly, in a better mood.
The boom peaked with the tech bubble. Things came back to some extent before 2008, but the mood never fully recovered.
I don’t buy that there has been any real economic recovery since 2008. The ‘recovery’ has been some sort of central bank engineered mirage. The world economy was heading over a cliff in 2008. They stopped it. But it was just stabilization. The economy is still in a terrible funk in Mississippi and many other states. That’s why sales and income taxes are not up to projections.
That’s why Trump won. People in the rust belt states that swung the election are in the same boat as Mississippians. And they were desperate to try something (or someone) else. Most of those Trump voters are realists. They don’t believe Trump will drain the swamp and save the day. They just knew that there was a 100% chance that Clinton would stay the heartbreaking course.
It’s a big problem with no easy solutions. Automation, robots, artificial intelligence, exporting jobs overseas, etc.. It all seems to be accelerating–not getting better. It takes fewer people to get the job done. Ten years from now, it will take even less.
My advice to the legislature is to look at reality on the ground and plan for it to get worse. We seem to be reverting to our grandparents’ economy.