Back in June I took Mish to task for saying:
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.
I pointed out that state sales tax receipts were,in fact, increasing. Mish still refused to acknowledge the data, citing several states' and municipalities' tax increases (some of them not even sales tax increases).
Well, yesterday the Rockefeller Institute published its final report on state finances during the April - June 2010 quarter, headlined "Sales Tax Gains 5.7 Percent in Second Quarter."
Here's the raw data, from page 17 of the report: Sales tax receipts in the 2nd quarter of 2010 totaled $61.171 Billion, vs. $57.897 Billion in the second quarter of 2009, a gain of $3.3 Billion, or 5.65% (rounded to 5.7%).
Here's a few snippets from the report:
Total state tax revenue in the second quarter of 2010 increased by 2.3 percent relative to a year ago, before adjustments for inflation and legislated changes. The income tax and sales tax both showed growth at 1.6 and 5.7 percent,(Italics and note in brackets mine)
respectively, while the corporate income tax declined by 18.3 percent.
...
During the April-June 2010 quarter, enacted tax changes increased state revenue by an estimated net of $4.9 billion compared to the same period in 2009. Personal income tax increases accounted for approximately $2.7 billion and sales tax for approximately $1.6 billion of the change. In a single state, California, legislated changes increased personal income tax and sales tax collections each by an estimated $1.1 billion. Legislated changes in New York were also significant for the personal income tax. Most of the increase in sales tax was due to legislated changes in California, Massachusetts, and North Carolina. [Note: The tables on p. 17 of the report indicate that these three states contributed $1.4 billion of the $1.6 billion increase due to tax rate increases] The net impact is that the increase in nominal tax revenue would instead have been a small decline, if not for the legislated tax changes.
Subtact the $1.6 Billion in state sales tax increases from the $3.3 Billion gain, and you have a net $1.7 Billion gain in sales tax receipts ex-tax rate increases, or +2.9%.
As of June 30, 2010, YoY CPI was up 1.1%, meaning that the "real" YoY sales tax increase from the second quarter 2009 was 1.8%.
While this does not exactly mirror the growth in real retail sales, it is noteworthy that, as the Rockefeller Institute puts it:
[E]ven if sales taxes precisely mirrored retail sales, they would be weak compared with two or three years ago. In fact, though, many state sales taxes exempt food and otehr necessities and exempt or exclude many services, relying more heavily on non[necessities. Many of these ... are far easier to do without or postpone.... They tend to ... suffer greater declines in business downturns.
Game. Set. Match. The debate about increasing real sales tax receipts is over.
