by David Safier (exclusive to El Blog for Arizona)
On PBS' Horizon, Host Ted Simons interviewed Goldwater Institute's Byron Schlomach along with an ASU economist discussing the sales tax hike.
Simons asked Schlomach exactly the right question about G.I.'s ridiculous claim that a 1 cent sales tax hike will cost the average family $400.
Where are you getting those numbers, because that suggests an average family is spending a lot of money, 40, 50, $60,000 a year on things that can be taxed. Where is that coming from?
Good question. Here is Schlomach's typically deceptive answer.
Well, first of all, what you do is you take the tax, the $918 million, divide by the population, you get a number per person. The average household is 2.64 people. You do the multiplication you get $373 to $400 [$400 if you use $1 billion as the total from the tax hike].
Unfortunately, neither Simons nor ASU economist Dennis Hoffman has read my frequent take down of this ploy, and they haven't talked to an economist at the Eller Business College at UA who explained to me how much sales tax is paid by tourists and by businesses, not by Arizona families. So Schlomach pretty much got away with his idiocy, as well as this snark:
Now, it's an average. I'm using an average. If you can't do average math, that's not my problem.
Jerk! First he creates a simplified equation that doesn't make any real economic sense, then, when he sees his opponents aren't prepared to rebut him, he belittles them. G.I. is populated with little, little people.
Here's another figure Schlomach pulled out, one that I've never heard. He said the average Arizona family of 2.64 makes $86,000 a year. $86,000? Are you serious? If that's true, the rich in this state are very rich, because the median is more like $65,000.
Schlomach said the average income per person, and that includes children, is $30,000.
Anybody out there know where Schlomach got his figures?
(h/t to Todd for letting me know about the video.)
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From wikipedia – http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP_(nominal)
“The BEA defines an industry’s GSP, or its value added, as equal to its gross output (sales or receipts and other operating income, commodity taxes, and inventory change) minus its intermediate inputs (consumption of goods and services purchased from other U.S. industries or imported). The BEA’s GSP data by industry and state is consistent with gross domestic product (GDP) in the national income and product accounts, and with the GDP by industry accounts.”
What does Gross State Product have to do with income? The total amount of money generated in the state doesn’t all go into income, does it? “Gross” means before things are taken out, like expenses.
These seem to be two distinct figures, which means, if that’s what Schlomach used, he’s doing more than fudging figures. He’s lying.
Can you clarify?
According to http://www.statehealthfacts.org the median household (not family) is $45589 compared to the US household median of $51233. Even more important is that the poverty rate based on household income is 18% compared to the US rate of 13.2%.
Per the census, the median family income for a family of 4 is $61,102.
Schlomach is playing a game here by using the average income, which is totally meaningless and this is why most people trying to do honest comparisons don’t use it. Again, the plays on the double meaning of ‘average.’ When most people hear that I think the interpretation is ‘typical.’ In other words this is what the typical families income is. They must learn these tactics in the right-wing think tank training camp.
Oh, the $30k figure is most likely the per capita Gross State Product which is $32k per person. This is of course near the bottom but I can’t for the life of me understand what point he was trying to make with the figure. It is totally irrelevant to what was being discussed.