Louisiana is really not a poor state
By Allen Lottinger -
July 06, 2006
Louisiana is often referred to as a “poor state” but that’s not really true.
Our state is rich in natural resources that the entire country and, to a great extent, the entire world is dependent upon.
That is the opinion of C. B. Forgotston who truly is our major watchdog on government in Louisiana. When things go wrong in Baton Rouge, you can bet your bottom dollar we will get an e-mail from C. B.
He continues: “Unfortunately, the economy that we have is based almost entirely on the extraction and transmission of these natural resources. We extract and transmit them elsewhere in the country to turn them into useable products for America and the world.
“Thus it is not ‘the state’ per se that is poor. We do have a lot of low income people living in LA. Some would attempt to argue that is just the other side of the same coin. It's not and it is an important distinction in determining why. Even before the recent natural and man-made disasters befell us, the population of LA, unlike the other southern states, was becoming older, poorer and less-educated.
“Why don't we extract AND process these natural resources in the state? Processing of these natural resources is obviously where many good-paying jobs lie. Sadly, our people are following our resources out of the state resulting in net out-migration. Common sense would indicate that the shorter the transmission distance the cheaper the end products. The answer lies partially in the level of our state and local taxes.
“Over the last 10 years, state spending has increased by over 150% ($10 billion to $26 billion). Yet LA remains mired at the bottom in terms of economic activity. State and local taxation as a percentage of medium income continues to increase, thus serving to show that bigger government is not the solution and that it is not possible to tax ourselves into prosperity.
“The problem with LA having too many poor people can be explained by this vicious economic circle: (1) LA's tax burden is too high for the income of average citizens. (2) The incomes are low because the taxes are too high on businesses that create the good-paying jobs. (3) By keeping the taxes high, our citizens become and remain dependent upon government. (4) The dependency upon government by the citizens requires that the taxes remain high.
“Metaphorically speaking, rather than teaching people to fish or providing them places to fish, government in LA prefers to dole out fish for each person to eat.
“We are in a downward spiral of higher taxes and more poor people. The ‘First Law of Holes’ is when one finds himself in a hole - - stop digging.
“The solution is simple. Lower state and local taxes on businesses and individuals at least to the level commensurate with the income level. (I recommend much lower taxes on businesses to offset other anti-business problems in LA.) The economy will prosper because businesses will be more profitable and create more and better-paying jobs. People will become less dependent upon government for their survival because they have good-paying jobs. As the economy grows, revenues to state and local government will grow with the economy, not IN SPITE of the economy.
“LA is NOT a ‘poor state.’ However, we are quickly becoming one.” Well said, C. B.