Shreveport Times: Taxes – Where is Louisiana?
media mentionNov. 15, 2013
Written by
Tommy Williams
Special to The Times
Right now, inflation is not meeting expectations — and that may be a good thing.
Critics of the prevailing monetary policy and low interest rates have predicted inflation will rise. Martin Feldstein, president of the National Bureau for Economic Research, explained in 2012 that massive liquidity created in the U.S. as a result of the Fed’s easy money policies had caused a risk of rising inflation. A rapid increase in bank credit would boost the money supply and inflation rate unless the Fed raised interest rates in a timely way and on an adequate scale.
So far, low interest rates and unusually aggressive monetary policies haven’t led to higher inflation. The Harmonized Index of Consumer Prices (HICP), an inflation measure, showed prices in the U.S. increased by only 0.8 percent in September 2013, 1.3 percent slower than 2012. The Eurozone inflation rate for October fell to 0.7 percent, the lowest in almost four years. A recent article in The Economist explained why inflation hasn’t performed as some predicted:
“Central banks are not the only, nor indeed the main, money creators. Money is usually created by the private banking system and that has been trying to shrink. If the money supply is a bath, then the central banks may have turned on the taps, but the commercial banks have pulled out the plug.”
That may mean, despite stable and falling inflation rates in some regions, we’re not out of the woods yet. As Feldstein wrote last March, commercial banks could begin to lend funds to firms and households, which could increase the money supply, thereby increasing pressure on inflation. Of course, wages are the primary factor driving inflation and with unemployment remaining high it doesn’t look like many people will be getting a raise anytime soon.
However, raise or no raise, you’ll get to pay taxes. So, how do your state’s taxes stack up? It all depends on who you ask and what types of taxes you’re considering.
The Tax Foundation’s State Business Tax Climate Index for 2014 reported the most tax-friendly states for business were Wyoming, South Dakota, Nevada and Alaska. Every state has property taxes and unemployment insurance taxes, but those ranked at the top typically don’t have at least one of the major taxes: corporate income tax, individual income tax, or sales tax.
Kiplinger’s says that Delaware, Wyoming, Louisiana and Mississippi are some of the most tax-friendly states for individuals. However, state tax policy director for the Institute on Taxation and Economic Policy, Meg Wiehe argues “Low tax revenues may give a state less money to spend on education, transportation, public safety, and other services important to you and your family… Low taxes don’t necessarily lead to a higher quality of life.”
Retirees may want to consider a move to Alaska, Wyoming, Georgia, or Arizona, which have some of the lowest taxes for retirees in the U.S. However, according to Kiplinger’s, they may want to avoid Rhode Island, Vermont, Connecticut and Minnesota, which are some of the least generous with retiree tax credits.
If, after reading this, you’re considering a move to the Cowboy State, here are some other things Wyoming has to offer: Yellowstone, the Grand Tetons, Jackson Hole, and about 172 days a year with a temperature below freezing! Perhaps retiring in Louisiana has its perks — friendly people, great food, warm temperatures, Duck Dynasty, Billy the Exterminator – just to name a few. Obviously, taxes aren’t everything.