Friday, September 3, 2010

Mish has lost all credibility re State Sales Tax Receipts

- by New Deal democrat

I last blogged about Mish's accidental bottom ticking in early July, saying that The Emperor of Doom wears no Clothes, shredding his claim that retail sales gains were a mirage because, allegedly, state sales tax returns were still declining. Here's what he said then:
Month in and month out we hear the same nonsense about retail sales. I will believe it when I see state sales tax collections support the claims.
states have been reporting declining sales tax collections for the entire year.
Unfortunately for Mish's claim, checking state sales tax collection reports showed that in the second quarter almost all of them were increasing!

In rebuttal to a comment our reader Constant Learner attempted to leave on his blog, Mish cited an article from July 2009 w/r/t tax increases in many states that rose earlier in 2009. Any of those increases already in effect in May 2009 are equally applicable to both years and support the data I cited. He also cited a California article that references the many tax increases that took place beginning in April 2009. Again these are applicable to both years and so support my point.

Well, as Bonddad reported earlier this week, the Rockefeller Institute came out with its initial report on second quarter state revenues. Mish duly quoted them as follows (my emphasis):

Sales tax collections increased by 5.9 percent in the second quarter of 2010 compared to the same quarter of 2009, but were still 5.4 percent lower than two years ago. With 42 of 45 sales-tax states reporting so far, only seven states reported declines in sales tax collections compared with the same quarter last year.
To which Mish replied (without any reference to supporting data):
Much of the improvement in sales taxes is a result of tax hikes, not increased sales. Those effects will soon wear off in year-over-year comparisons
Note btw that Mish doesn't say tax increases are responsible for all of the improvement, just an undefined "much" of it.
So let's review:

1. Mish says that "I will believe [increases in retail sales data] when I see state sales tax collections support the claims."
2. The Rockefeller Institute reports that sales tax collections increased.
3. Mish discounts the Rockefeller Institute report, without citation to contrary data.

Mish has lost all credibility when it comes to state sales tax receipts.

And by the way, contrary to his last sentence, July state sales tax receipts don't help him out either. Here they are:

New York:
sales tax receipts up 7.7%
total tax receipts up 6.8%

Indiana up 10% YoY in June

Texas up 7.6% YoY

Tennessee July up 5.94% YoY

Alabama up 1.31%

Georgia up 2.4%
4.7% total tax revenues

Calif up 1.2% YoY June (UPDATE: July up almost 20%)

FL up 2.6% YoY in July

Ohio up 9.6% in July

New Jersey's data was unavailable.

Since both of the articles Mish cited two months ago dealt with tax increases that predated the second half of 2009, they don't apply, as previous tax hikes wouldn't affect YoY July numbers. I eagerly await Mish's attempt to discover tax hikes in those states that occurred after last July.