September 23, 2008
Tax Foundation Responds to Controversy Over North Carolina Political Ad
—Republican Governors Association Television Spot Cites State-Local Tax Burden Study
Washington, DC, September 23, 2008 - The following is a statement from Tax Foundation Senior Economist Gerald Prante, author of the 2008 edition of the foundation's annual estimate of state-local tax burdens, "State-Local Tax Burdens Dip As Income Growth Outpaces Tax Growth," Tax Foundation Special Report, No. 163.
"Each year since 1990, the Tax Foundation has published an estimate of combined state-local tax burdens in each state, counting all state and local taxes, dividing by income, and ranking the states. We use historical data to compute the burden in past years, and for the current year we estimate tax burdens based on the latest available data. When government agencies later revise their data, we then revise our series to reflect those final government tallies.
"Improvements in the study's methodology are another source of revisions. In 2008, new data on interstate home ownership and nonresident income tax returns were incorporated, and a different definition of income was adopted. These two sources of revisionsnewer data and improved economic analysis—are part of every recurring publication in public finance. However, these revisions can present problems for people who have relied on earlier reports.
"We have become aware of a television advertisement created by the Republican Governors Association that has become the subject of complaints and charges of inaccuracy. The ad accurately cites our 2007 estimates of state-local tax burdens. On August 8, 2008, we posted the 2008 report and removed the link to our 2007 report. However, we did not remove the 2007 report from our website, so a search engine could have found it, and we neglected to follow our usual custom of putting a warning on each page of that report, telling viewers that the data have been superseded. That has now been done.
"As more public finance data is published in electronic form, the Tax Foundation will continue to improve this annual report on state-local tax burdens. Ultimately, our goal is to be able to tell each state's residents as exactly as possible what percentage of their income they paid in state-local taxes.
"The latest available data should always be used, but in the internet era, data revision has become an almost non-stop activity. As a result, most publications or broadcasts that take any time to prepare are ‘incorrect' in some respect by the time they come out or soon thereafter. As a nonpartisan, nonprofit organization, we cannot take a position on whether this ad should run on North Carolina broadcast stations."
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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If you have any questions, please contact Matt Moon, the Tax Foundation's Manager of Media Relations, at (202) 464-5102.
