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**FEBRUARY 16, 2021**

Meyerson on TAP

What Having No Income Tax Gets a State During a Pandemic

Big trouble, that's what.

The print edition of today's

**Washington Post**led off with a story

reporting that state and local governments have been compelled to lay
off 5 percent of their employees since the pandemic began, even as the
pandemic has asked those governments to provide emergency services on a
scale to which they're unaccustomed.

The reason, of course, is that the pandemic has greatly reduced major
sources of tax revenue. Hawaii has suffered from the drop in tourism;
the oil-producing states of Alaska and North Dakota have suffered the
consequences of the drop in driving.

One subject that the article neglects to consider, however, is what kind
of taxes the various states levy. And it's precisely on this subject
that the major differences in the individual states' finances become
clear.

The states with the most progressive income taxes, it turns out, have
been able to ride out the pandemic with little if any fiscal disruption.
California, perpetually derided by right-wingers for having the most
progressive income tax, actually saw no reduction in revenues between
2019 and 2020, as the wealthy have been doing just fine financially
during the plague and paying their regular share of taxes. Likewise New
York, Massachusetts, and Pennsylvania, which saw revenues dip by just 3
percent. Florida and Texas, by contrast, are by far the largest states
that have no income taxes
,
and they saw their revenues decline by 10 percent. As for reduction in
public-sector jobs, good old "Live Free or Die" New Hampshire-another
state with no income tax-saw its state workforce shrink by a
mind-boggling 26 percent, a full nine percentage points more than the
second-ranked state.

While Republican governors and mayors are demanding that Congress retain
the funds for states and cities that President Biden has allotted in his
proposed $1.9 trillion rescue legislation, Republican members of
Congress repeatedly have said they oppose such aid, terming it a
"blue-state bailout." But it's not the blue states that have seen
their revenues tank; it's the red states that don't wish to disturb
their wealthiest residents by asking them to support public services.
There's no blue-state bailout. If anything, there's Democrats'
concern for the red-state residents who have suffered from the cutbacks
imposed by their Republican statehouses in thrall to the demands-and
campaign contributions-from the rich.

~ HAROLD MEYERSON

Follow Harold Meyerson on Twitter

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Treasury Wants to Save the Financial System From Climate Collapse

But banks are already pushing back against a new initiative to
foreground climate risk. BY DAVID DAYEN

Why Is Michael Bennet Defying Joe Biden's Call for Non-Corporate
Judges?

The Colorado senator has recommended a top corporate lawyer for a
federal district court seat, after Biden specifically asked for public
defenders and civil rights attorneys. BY ALEXANDER SAMMON

⏩ Democrats and the Government, Together Again: Watch Our Jan/Feb 2021
Issue Release Event

In celebration of our first print issue of 2021, we assembled Prospect
staff and contributors to discuss the year ahead and features from the
issue. BY PROSPECT STAFF

First 100: Reopening All Schools Requires Public Investment in the
Poorest

Plus, CARES Act tax breaks to opioid manufacturers. BY DAVID DAYEN

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