Tuesday, December 28, 2010

Governor Doyle Good For One Last Laffer

From the Journal Sentinel (my bold):

Madison — The state's bleak budget outlook brightened a bit Monday, as state officials projected that Wisconsin will take in $57 million more in taxes this year than previously expected and $235 million more over the following two years...

Gov. Jim Doyle's administration said the higher projected tax revenues were largely the result of the recently announced tax bill compromise between President Barack Obama and Congress.

"These projected revenue increases are a direct result of President Barack Obama's recently enacted tax cut bill and additional (state) personal income data showing continued growth in Wisconsin's economy," Administration Secretary Dan Schooff said in a statement.

Got that? The Bush/Obama tax rates are responsible for increasing WI tax collections. At least according to Democratic Governor Jim Doyle.

I found this a little amusing, since just other day, Capper linked to an article that said this was one of the myths only conservatives believe:

1. Cutting Taxes Leads to More Money for the Government

Conservatives can't say they oppose popular programs on ideological grounds, and they can't admit they're happy to run up huge budget deficits, so they've come up with the fiction that cutting taxes actually brings in more revenues to finance the public sector....

It's also complete nonsense, and it's worth noting that only conservative politicians and pundits make the claim -- economists across the ideological spectrum agree that the argument is cursed by voodoo math.

Guess we'll have to change this one to a myth that only conservatives and Governor Doyle believes.

The fine print:

A good partisan blogger would just stop there and people from both sides would leave this post just having their previously held beliefs reinforced. Since one of my goals with this blog is to actually inform and persuade, let me throw in a few disclaimers.

Conservatives - It's clear that tax cuts do not pay for themselves over the long run. They don't. Stop repeating this like a mantra. They also don't reduce the size of government, you shouldn't need any bigger proof than the current national debt. Focus on the spending and the taxes will sort themselves out.

Liberals - High marginal tax rates have a disincentive effect on work. When you frame this entirely as the ultra-rich giving up some conspicuous consumption, you are kidding yourself if you think this doesn't affect the rest of us. When Donald Trump doesn't do a deal and decides instead to cut expenses, you may cry crocodile tears over the fact that he cancels his dog's yoga class. If you want to see some real tears, talk to the canine yoga instructor who was living her dream and making $50k a year.
Making everyone poorer, doesn't make the poor better off.

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