You pay it every time you go to the pump – but how much do you really know about the gasoline tax in Rhode Island, Massachusetts and Connecticut? Find out how much the tax actually costs and where the revenue ends up.
Thank goodness for California.
If it weren’t for the Golden State capital of Sacramento, there wouldn’t be a single large metropolitan area in the United States where Providence could say the job market is worse.
Among the country’s 50 biggest metro areas, only two – Sacramento and Providence – reported an overall decrease in employment during the 12 months ended in February, the Bureau of Labor Statistics reported this week. The Providence metro area includes Rhode Island and part of Bristol County, Mass.
“In Sacramento, the decline was mostly due to continued drops in state and local government employment; private employment was essentially flat over the year,” The Economist’s Ryan Avent reports. “In Providence, by contrast, government employment rose; lingering weakness across the economy seemed to be the issue.”
There have been five recessions in Rhode Island since 1970, and the state has lost a lot of jobs each time. The chart below from the Department of Labor and Training gives some perspective about the scale of what’s transpired in this latest downturn and the snail’s pace of the recovery.
The current situation (shown in black) looks uncomfortably like the decade-long slog to recover from the collapse that began in 1989 (in red) – another recession in progress that was significantly exacerbated by a financial crisis (in that case, the credit union fiasco).
Take a look:
Note that this chart is as of September – Rhode Island lost another 2,300 jobs in October and November. At last count the state’s total payroll figure was exactly the same as it was back in December 2010. (Of course, all those numbers could change significantly once the annual revisions are released.)
… but not Fidel Castro! And, I fear, perhaps not the media either if we’d been included.
(chart: U.S. Sen. Michael Bennet, via The Fix)
Gas prices jumped in Rhode Island yet again this past week. The average for self-serve unleaded is now $3.73 a gallon, up 11 cents from a week ago, AAA reported today in its Monday morning survey.
That’s an increase of 33% over the past six months – the price was $2.80 a gallon in October – and the highest average since the oil shock of August 2008. Calculated Risk now classifies rising oil prices as “the top risk to the U.S. economy” and its middling recovery.
The only upside to rising gas prices? It’s a good excuse to post a chart.
The Tax Foundation recently put up this map showing gasoline taxes across the 50 states. “This includes the base excise tax, plus an assortment of other taxes and fees that affect the price of gasoline,” the group says.
Rhode Island created its gas tax in 1925, and the rate here has been set at 33 cents a gallon since 2009. That’s the 11th-highest rate in the country, according to The Tax Foundation; Massachusetts’ 23.5-cent tax is 27th-highest.
California’s gas tax is the highest of all at 47.7 cents a gallon, and Alaska’s is lowest at 8 cents. All those are in addition to the federal gas tax, which has been 18.4 cents since 1993.
A reader sent along this dramatic animated map of job gains and losses in the 100 biggest U.S. metro areas from 2004 to the present. It was created by TIP Strategies, an economic consultancy out of Texas, which explains that “the size of the bubbles on the map represent the change in jobs from April ’09 to April ’10, and so on.”
I recommend clicking over and watching the chronological animation once you finish reading this post, but first take a look at how big those red job-loss bubbles got in June 2009, around the worst of the recession:
They remind me a little of the pink elephants in “Dumbo,” and they are absolutely huge compared to everything that comes before in the interactive’s 2004-2008 maps. And as you continue watching, you see our present problem pretty clearly – the red bubbles still haven’t been followed by green bubbles of anywhere near the same size.
Put another way, although we’ve escaped the red bubbles – job losses – we still haven’t gotten good-sized green bubbles – job gains. It goes back to that David Leonhardt metaphor of the unemployment gymnasium I mentioned earlier this month – it’s still very hard for jobless workers to escape the gym, even though (thankfully) few others are being pushed in there at this point.
Like I said, check the map out.
If so, you’re in luck! The Pioneer Institute in Boston commissioned a huge, detailed visualization of Massachusetts’ state budget for this fiscal year and it’s nothing short of awe-inspiring:
Here’s how Pioneer describes it:
The map presents hundreds of government departments, agencies, and programs in a visual format, proportionate in size to their funding level. Looking at the whole map, viewers can ascertain the state’s spending priorities. You will also be able to scroll over and zoom into each component for a more in-depth examination of the number of agencies and departments that exist, and easily identify bureaucracy, inefficiency, and unnecessary duplication.
The chart was made by Jess Bachman, who’s gained Internet fame for her famous Death & Taxes poster.
OK, now I really want somebody to commission one of these babies for Rhode Island. How ’bout it, John Simmons?
Apropos the chart I put up earlier showing Rhode Island household income, NEARI‘s Pat Crowley pointed out that a more accurate way to look at state residents’ earnings in the context of the Bush tax cuts would be to show the breakdown for Rhode Islanders’ adjusted gross income, or AGI. That represents your income after deductions and is used to calculate your tax bill.
When reporters say Republicans want to extend the Bush tax cuts “for households earning $250,000 or more,” we really mean “for households with adjusted gross income of $250,000 or more.” But that would clog up our stories, so most people go with the shorthand. Thus, a household with total income of, say, $300,000 but AGI of $240,000 would be eligible for the Bush tax cut rate under either plan.
Crowley’s comment gives me an excuse to put up yet another chart. Here’s one breaking down Rhode Island taxpayers’ AGI on their 2008 tax returns, according to the Division of Taxation. It’s quite a different picture:
Like a singer at a sleazy bar, I take requests. Do you have a question you’d like to see answered in a chart? Let me know and I’ll try to find the figures and whip one up. (My old math teachers would be so proud. Not to mention incredulous.)
Update: The Obama-GOP deal would also reportedly cut the payroll tax (the one that pays for Social Security and Medicare) from 6.2% to 4.2% next year, presumably in an effort to stimulate consumer spending.
Under that proposal, a worker who makes $40,000 a year and gets paid biweekly would receive an extra $33 per paycheck, or $800 over the course of the year, according to The Tax Foundation.
Update #2: Haven’t heard from Reed or Whitehouse yet – there’s an impeachment trial going on in the Senate today, so they’ve been tied up with that. Kennedy’s spokesman never responded. Langevin’s office issued this statement, which leaves the door open to supporting Obama’s proposed deal:
In the coming days I will be studying the proposed tax deal, meeting with colleagues and listening to constituents. Preserving middle-class tax cuts remains one of my top priorities. However, at a time when we are asking unemployed families and low-income seniors to share in the sacrifice necessary to balance our budget, I have said many times that it is not unreasonable to ask the richest two percent to do the same.
Update #3: I asked Tax Foundation economist Mark Robyn whether AGI was the appropriate measure to use. He said Congress’ Joint Committee on Taxation and organizations like his do use AGI for these calculations.
“What that actually means for where income tax increases began to take effect (via higher rates, or more aggressive phase-out of provisions like itemized deductions) is another question,” Robyn said. The committee has taken Obama’s promise to mean income minus the standard deduction and either one or two (for a married couple) personal exemptions.
If you adjust for inflation, that would be $235,150 for a couple filing jointly and $193,800 for a single taxpayer, Robyn said. Whew.
The big political news today is President Obama’s deal with Congressional Republicans to extend all of the Bush tax cuts for another two years and reduce the estate tax in exchange for extended unemployment benefits, a payroll tax cut and other policies.
I’ve reached out to Rhode Island’s Congressional delegation to get their reactions to the deal, which met with a tepid response from Senate Majority Leader Harry Reid when it was announced last night. Spokesmen for U.S. Sens. Jack Reed and Sheldon Whitehouse said they won’t be commenting prior to a lunchtime meeting of all Democratic senators. I left messages with U.S. Reps. Patrick Kennedy and Jim Langevin.
Obama and the Republicans always agreed that the tax cuts for families making less than $250,000 should be extended. That accounts for roughly 80% of the extension’s 10-year, $3.7 trillion cost. The debate was over whether the cuts for families making more than $250,000 should continue. For context, here’s a look at what percentage of Rhode Island households earned different amounts of money in 2008, via the U.S. Census Bureau: