RALEIGH – In my ongoing efforts to comprehend the rhetorical contortions of the Left, I’ve run up against a brick wall.

On the one hand, liberals inside and outside the North Carolina legislature are claiming that changes in state taxation have no discernible effect on the performance of state economies. In response to projections that Republican tax policies would create thousands of private-sector jobs over the next two years, liberals argue that differences in state tax rates are too small to matter much in the whole scheme of things.

On the other hand, many of those same liberals are offering dire warnings about the economic consequences of Republican spending policies, particularly in education. If per-student spending were to decline in North Carolina’s public schools, colleges, and universities, liberals claim, the result would be devastating for the state’s economy.

I suppose that, to the liberals making these two separate claims, they sound consistent. I’m going to give them the benefit of the doubt and assume that they just haven’t thought through the specifics of what they are claiming.

Certainly it is possible to overstate both the differences among states in tax policy and the effect of those tax differences on state economies. I’ve seen business lobbyists, conservative policy analysts, and Republican politicians make this mistake quite a few times. Particularly if you look at the average state and local tax burden – the broadest-possible measure of government cost – you’ll see that, except for a few outliers, the states tend to clump around the national average.

Consider North Carolina’s situation. State and local taxes consume about 9.8 percent of personal income, a rate slightly higher than the national average and higher than every other Southern state except Arkansas (at 9.9 percent). But the rate is only about 7 percent higher than that of Florida and 8 percent higher than in Virginia and Georgia. Even when you consider truly low-tax states such as Texas and Tennessee, North Carolina’s average tax burden is higher by 24 percent and 29 percent, respectively, which is certainly meaningful but has to be understood within the context of the total array of costs facing households and businesses. A 29 percent difference in a cost, the tax burden, that can itself be small relative to other costs (such as land, labor, energy, or transportation) will not necessarily determine the outcome of all or even most economic decisions.

Of course, conservatives and others who worry about the deleterious effects of excessive taxation have never claimed that taxes are the only consideration, or even the most important. The economy is far too complex a system to be described that way.

Furthermore, we don’t believe that average tax burden captures the most relevant information about state tax policies. The marginal tax rate – the rate a household or business faces on the next dollar earned or spent – is more important. All other things being equal, states with narrow tax bases and higher marginal rates post weaker economic performance than states with broad tax bases and lower marginal rates, even if their average tax burdens aren’t all that dissimilar.

But competing claims about state tax policy are old hat. Consider the liberals’ second argument – that differences in state spending policies are where the real action is when it comes to explaining economic growth.

Really? The truth is that, just as is the case with tax policy, most states don’t differ wildly from the average when it comes to the size and distribution of their budgets. Nor is there as large a difference in policy outcomes as boastful politicians often claim.

Look at test scores. In the most recent math and reading tests from the National Assessment of Educational Progress, North Carolina 8th graders rank above the national average in math and below the national average in reading. But the differences, while statistically significant, are not exactly earth-shattering. Our average scale score in math is 284, vs. a national average of 282 and supposedly backward South Carolina’s average of 280. Our average scale score in reading is 260, vs. a national average of 262 and South Carolina’s 257. (Most of that small difference between the two Carolinas is attributable to differences in the test-taking population, by the way, not education policy.)

As for North Carolina education spending, you can summarize the supposedly yawning chasm between Gov. Beverly Perdue’s position and the Republican position as follows:

If Perdue has her way, North Carolina public schools will spend an estimated $7,747 per pupil on operating expenses. If the Republicans have their way, North Carolina public schools will spend an estimated $7,459 per pupil on operations. That’s a difference of about $288. Yawning is an apt description, as it turns out, but not of the gap between the two positions. Yawning would be the likely reaction of anyone outside the educational establishment to the idea that a difference of $288 per student represents “generational damage” to public education, as the governor alleged last week.

Most of the factors that influence state economic performance are not under the current or potential control of state policymakers. Still, I have no problem with politicians arguing a great deal about the variables they can control, even if the potential effects of their decisions are properly be measured in hundreds of dollars or thousands of jobs rather than in larger, unrealistic numbers.

In the John Locke Foundation’s recent work on the Perdue and GOP tax packages, for example, we didn’t predict massive effects either way. Our Beacon Hill Institute model estimated that the GOP tax package would result in net job creation (private jobs created minus public-sector layoffs) of about 8,000 next year, compared to about 1,400 under the governor’s plan. Keep in mind that North Carolina is still down about 300,000 jobs from its pre-recession peak.

Modest improvement is better than no improvement. I think policymakers should get the details of public policy right, even if the immediate gains are modest. What do liberals think? Darned if I can figure it out. Small differences in taxes don’t matter. Small differences in spending do matter.

How come?

Hood is president of the John Locke Foundation.