Brownback’s Tax Cuts and Migration Claims

Sam Brownback claimed that the tax cuts he passed in 2012 would compel 35,000 people to move to Kansas. This isn’t population growth (aren’t people turned on by high taxes?), but specifically migration.

I don’t think Sam Brownback believes he’s an evil guy who lies about things for fun, so I’ll give him the benefit of the doubt and assume that somewhere in some time series that he has access to he had good reason to believe in his tax cuts. More specifically, that there’s a case in publicly available data in which cutting top marginal income tax rates while doing nothing to offset the cut yields a huge influx of migrants to the low top tax-rate utopia. I don’t know that I’ll find anything, but I’ll do my best. (Also, not bothering with the supposed budget surplus and huge economic growth the tax cut was supposed to produce. That’s been handled in enough places already.)

The short answer turned out to be, if you don’t think too hard at the numbers, there’s a good reason for Brownback to believe that, net, people would move to Kansas more often than move out of Kansas in the years following his tax cut. I looked at each state that had a top marginal income tax rate cut followed by four years without another such cut to see if there was a naive reason to believe in Brownback’s migration story, and the results were sort of mixed. Simply, each state that qualified had positive net migration over the four years after which it passed its tax cut, but the migration patterns start to look pretty strange when you look at geographic variation.

First, the simple news. Here are1 the net migration figures for each state and tax cut year combination:

State Years Net Migration
Vermont 2001 774
Iowa 2008 1,029
Michigan 2005 913
Kansas 2008 1470
Utah 2008 957
Hawaii 2002 807
Rhode Island 2002 700
Nebraska 2008 765
Arkansas 2005 1,634
Massachusetts 2002 409
District of Columbia 2001 1,304
Maryland 2002 & 2006 4,087
Idaho 2001 949

That’s good for our good buddy Sam! Look at all of those positive numbers! But I have to urge caution. First, people move for a lot of reasons. The census question on why people move (2012 to 2013) showed some of the reasons and some of the ways they interact. “Top marginal income tax rate” wasn’t one of them,  but it doesn’t really need to be. Second, if top marginal income tax rate were a strong motivating factor for people to move, there’s a decent-sized cohort of states that have no income tax, which would make marginal reductions in the top income tax rate less appealing. For the tax rate to be the thing that pushed people over the edge, the claim has to be that for 765 people, from 2008 to 2011, holding all other reasons for moving to Nebraska fixed, the 1.61 percentage point decrease in tax rate on the next $1,000 earned over $1,500,000 (based on NBER TAXSIM methodology) swayed their choice. It’s possible to check the income of those who moved to Nebraska in this time period, but I haven’t done so. Regardless, I don’t think they were all millionaires.

Third, keeping in mind the second note of caution, the geographic patterns are sometimes really weird.

Colors here are:

  • Darkest red: at or above 90% of the maximum net migration to the state in question
  • Darkest blue: at or below 90% of the negative of the maximum net migration to the state in question
  • White: within 10% (positive or negative) of the maximum from zero
  • Black: indicates which state is being shown2

It makes sense that a lot of people moved from California, Florida, Texas, and New York to other states when there was positive net migration. Whatever factors were driving that net migration were going to drive more total people from these four very populous states, if only because there were more people possibly to drive. This is reasonable to believe unless you look at Michigan’s 2005 tax cut, which overall preceded positive net migration, but had large negative net migration to both Texas and California, but large positive net migration from Florida. You might claim that these populations are in some way qualitatively different, but then you’d have a lot of similarity to explain in the other maps.

Also, sometimes closeness seems to be the most important factor for where people seem to be moving, in which case we might think that people’s lives wouldn’t be that uprooted if they moved for a better top marginal income tax rate (see Idaho 2001, Kansas 2008, Maryland 2002 and 2006). This isn’t strictly reliable though, as Arkansas’s pattern of states with large in- and out-migrations is all over the place. Additionally, why did so many Kansans who left after the 2008 tax cut bypass Oklahoma for Texas?

Is there anything here? That’s unclear. There are counterexamples to any consistent narrative I’ve thought of lazily to throw at the maps, and I’m sure they’d change slightly with different cutoffs. Additionally, there are further tests I can do: checking net migration to neighboring states in the same periods, checking county-level net migration to and from states after tax cuts (in the spirit of Arin Dube’s minimum wage work), actually doing the data cleaning and lit work to estimate some sort of regression model.

As usual, all code available on github, with one caveat: ACS dataset I started with was 1.7gb, which is larger than github will let me upload. If you want the data, I’ll provide IPUMS instructions and the sql code I used to create the tables.

1On a 1% sample ACS scale, so I think multiply by 100 if you want to compare to a state’s initial population? I’m still unclear on this.
2Except in Michigan’s case, where I think I broke something in the code that handles the polygons that represent the shapes. Probably an upper and lower peninsula problem. Might fix later. I totally fixed Michigan.

 

Also I think I’m obligated to drop these two citations here as a precaution:

Steven Ruggles, J. Trent Alexander, Katie Genadek, Ronald Goeken, Matthew B. Schroeder, and Matthew Sobek. Integrated Public Use Microdata Series: Version 5.0 [Machine-readable database]. Minneapolis: University of Minnesota, 2010.

Feenberg, Daniel Richard, and Elizabeth Coutts, An Introduction to the TAXSIM Model, Journal of Policy Analysis and Management vol 12 no 1, Winter 1993, pages 189-194. http://www.nber.org/~taxsim.

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NIH Grant Funding Concentration – Are the rich getting richer?

Bill Gardner wrote about concentration of NIH grants and possible risks. The worry is timely because, in negative NIH funding growth environments, concentration might increase. There’s definitely negative growth in NIH funding:

So the question then becomes whether fears of concentration are justified. Grantome, an organization that provides information about grants and other forms of research funding, used the following standard to try to answer this question: if the past proportion of R01 grants an organization receives is positively correlated with its three-year annual growth rate in R01 grants, we’ll say grant funding concentration is increasing. They produced this chart:

There’s some obvious correlation there, but also an obvious problem: instead of the past proportion of R01 grants, they used the “current” proportion. The issue here is possible reverse causality: it’s likely that organizations that have larger proportions now would have grown more quickly over the last three years, because otherwise how did they get so big?

This question matters for reasons Gardner is clear about and that I agree with. Using a Richard Florida map showing scientific citations per capita in a number of the world’s cities…

…Gardner quips “Post-war global science has been led by the US, but not really. It’s been dominated by Massachusetts, the Washington-NYC corridor, and California.” His concerns are:

First, increasing concentration of science on the coasts will increase US regional economic and educational disparities… Second, a greater concentration of scientific dominance in a few liberal states is to the disadvantage of the NIH, because over time it must further erode broad political support for medical science.

These both make intuitive sense to me. The only assumption behind these concerns is that Congressional representatives systematically vote for bills and budgets that send more funds to their own states and against bills and budgets that don’t, which, duh.

So it is a problem that grants are concentrated, but fortunately, they don’t appear to be getting more so. When I fixed the Grantome chart to look at proportion of grants held in 2010, the correlation vanished entirely. Instead, we had a nice funnel, showing diminishing variance but no drift as we increase the proportion of grants held. “Big” organizations are those with at least 1% of all R01 grants, “little” organizations are all others (with an arbitrary cutoff of 0.02%, because Grantome did that).

In fact, I checked each year’s proportion of grant’s held vs. three year annual growth rate in number of grants from 1986 to 2010, and that same funnel pattern was present in all of them:

This says nothing about the current level of concentration, which is still scary for the reasons mentioned above, but at least grant funding concentration doesn’t appear to be getting worse.

(all code/datawork available on Github)

Terrified that we might be wrong about the shutdown webblogging, rd. 1

A lot of reporting on the shutdown has focused on the irrationality of the GOP position on several fronts: first, the irrationality of their demands; second, their shifting targets; and third, how the GOP has become a party of petty extortionists. I think all of these approaches miss the point when a much simpler explanation is available. It’s easy to rationalize Ted Cruz’s and the House GOP’s actions if you guess that they don’t actually want the government open.

Or, simplified, this is the situation everyone seems to be imagining:

maybe

Both sides want an open government, each side has some sort of binary issue it cares about that the other hates, there’s an issue of degree where there’s room for each side to give a little, and a deal looks not only possible but likely. If this were your starting position, you’d be very confused about why Republicans seem uninterested in making “reasonable” demands.

If, however, this is more appropriate:

maybe2

…we have a much more challenging situation. There’s nothing both sides want, and since an open government is something only Democrats want (and it’s not unreasonable to think of an open government as the  biggest thing on their list of demands), it requires a roughly comparable concession in order for both sides to feel like they’ve gotten something. If Democrats don’t understand that they’re the only side that wants an open government, they will continue fundamentally to misunderstand what the GOP is up to.

But why the House GOP would want a closed government probably requires some explanation. I have two. First, the GOP still labors under the myth of ever-expanding government payrolls and expenditures, while neither of these appears to be accelerating:



It hasn’t mattered at any point during the recession whether this myth was true. If this is the world in which the GOP lives and both need to be cut, a government shutdown gives them larger reductions of federal employment and expenditure than any deal they could possibly extract.

Second, inasmuch as Ted Cruz is proud of pissing off everyone he didn’t “push into traffic and walk away” from, there’s little reason to believe that he has any plan related to actual policy. It’s inane, posture-heavy and substance-light, but if Cruz is contemplating his future as a non-Senate candidate, this is an episode he can point to in which he “broke with the Washington establishment” or something equally hollow. Further, election season is a long time and probably at least one more debt ceiling crisis away. If Anthony Weiner can make a serious push for NY Mayor, I don’t know why we’d expect serious long-term consequences for Cruz, while, with the benefit of some distance in time, he can probably spin his intransigence into “principle.”

There’s a possible third reason in which Rs just want to throw 800,000 employed people — or about 5 months of average job growth — out of the labor force for a lil bit in an effort to keep things awful for the 2014 midterms, but that sounds almost evil, so I’m going to leave that one.

None of this suggests irrational behavior. The Republicans responsible for the shutdown are less baffled by the way public opinion has turned against them than they are preoccupied with furious masturbation to their destructive fantasies. There’s no reason to believe that explaining the political realities of the shutdown to them will change anything, because they aren’t concerned about the political realities (and they already know). The assumption here that the obstructionists don’t know what they’re doing is lazy and destructive to good analysis, and deals predicated on the belief that Democrats and (radical) Republicans want one of the same things will invariably fail unless Boehner and a collection of Senate Republicans in an instant take back control of their party.

Backtracking, FAST

I’d like to pause for a moment and point out how totally wrong I was have already managed to be about the debt ceiling. When I claimed that House Reps’ breaking the Hastert Rule twice in two months was extremely unlikely, I hadn’t counted on their breaking it twice in two weeks. When I was in DC a few weeks ago, Sen. McCain was talking about what I think was the Senate version of that bill. He kept going on about trees and how the government doesn’t need to buy new ones. He might just have been killing time until Obama and the House and Senate leaderships returned from a fiscal cliff meeting, but regardless, the objections didn’t sound like something anyone was going to rally around. I don’t know exactly what was in the House bill, but outside of ideological objections to the government’s buying and planting trees, nothing discussed while I was there for an hour and a half seemed objectionable.

I also assumed the Republicans had some of that legendary party discipline left over and that they, as a group, still had credibility about being insane. That no longer appears to be the case. If the Koch brothers, Republican legislators in both houses, and a group of economists that was convinced to say that Romney’s tax plan added up are all bailing on a plan, that plan must be so insane or so dangerous that it’s not worth it to find out what happens if you actually do it.

There are still sequestration and the budget in the month after the debt ceiling deadline, but it seems like both sides have given up on having a big fight about the debt ceiling. If I sound disappointed, it’s only because I don’t know yet what occasion hard money advocates or people confused about fiat money will have to make more graphics like this one in the coming fights:

(borrowed from The Daily Beast)

Yo, I Heard You Like Optimism

So Mike Konczal put some optimism in your strategic analysis of the debt ceiling.

The relevant image:

Noticeably absent from this table’s “negotiate” branch is “weak deal,” which past discussions suggest might include (the worst idea) gutting reforming social security and medicare with chained CPI or a change in the eligibility age.

Pruning the “negotiate” branch — that is, credibly committing to being insane — would have forced the tree down the “don’t negotiate” branch in a world in which House Republicans don’t want the platinum coin to happen. This could have been done through disconnecting the phones in the White House, announcing a vacation to Hawaii until Feb. 16, and launching a “Design the Platinum Coin” contest in the nation’s elementary schools similar to the one that was done for the state quarters.

It’s not that #mintthecoin is a good choice or good outcome, but it had to stay on the table to make pruning the “negotiate” branch credible. Obama has to believe that the House Republicans both hate the idea of default and take his cheap talk verbal commitment not to negotiate seriously, and he has no reason to believe either.

Getting My Worrying in Early

There are too many things to worry about, the the official demise of #mintthecoin has me focused on the debt ceiling.

Obama has committed to not minting the coin, which I think everyone has to agree is a crazy idea anyway. Tim Duy, for instance, claims that too much was at stake in terms of fiscal and monetary independence for the Fed to accept the coin anyway, so the president and treasury would have been pretty much on their own. That’s fine in a world in which reconciliation is a reasonable bargaining strategy. A shuns extreme strategic choices, convincing B that A is reasonable, so B shuns extreme strategic choices. It’s unclear that that’s the expected result in this case though.

A Politico story quoted House Republican Conference Chair Cathy Rodgers as saying “I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious.”

Unless the noisy and extreme House Republicans take seriously the chance that Obama is willing to pursue strategies as insane as theirs, they have nothing to worry about. Obama’s threats to make sure everyone knows that everything is the House Republicans’ fault are basically a promise to call them bad names. It’s like he actually believes that because several articles have described his having a mandate — it’s in his inventory next to three ultra balls and a hyper potion — he has a cudgel. Unless there’s a sea change in the House Republicans, I don’t know how we’re going to get around the debt ceiling without Boehner breaking the Hastert rule twice in three months, and he’s never winning anything above a county commissioner seat as a Republican if he does that.

So: Boehner can’t afford to cave, and Obama has made a point of caving in advance. Your Medicare is going away! Your social security is going away! Your education funding is going away! Your ACA provisions are sunk!

Krugman is understandably cynical about whether Obama has a backup plan. It seems like he probably doesn’t. Someone get this man a game theory textbook.