By Robert Mann
Come on, conservatives, I dare you. If there ever was a time when Louisiana’s supply siders should enact their economic theories, it is now. Louisiana faces a devastating $1.6 billion budget shortfall in the coming fiscal year. Tumbling oil prices are partly to blame, but the state’s predicted revenue shortage before oil prices collapsed was a whopping $1.4 billion.
Louisiana government badly needs more revenue, and anti-tax conservatives like Gov. Bobby Jindal have preached for years that the surest way to stimulate the economy (and produce more revenue) is to slash or eliminate taxes.
So, why is it that when Louisiana faces its most serious budget crisis in a generation Jindal and legislative Republicans chicken out? Why won’t they put their tax cuts where their mouths are?
If they really believed that slashing income and corporate taxes supercharged the economy, wouldn’t this be an auspicious time to enact their theories? If trickle-down economics worked like Jindal and so many Republicans insist, then why aren’t we doing it now?
Could it be they know what serious economists have understood for years — supply-side economics is a fraud.
To his credit, Jindal did propose what he claimed was a revenue-neutral plan to eliminate the state’s personal and corporate income taxes in 2013. The plan didn’t survive the first day of that year’s legislative session. Some of the opposition sprung from Jindal’s proposal to increase state sales taxes by 50 percent. The whole plan was poorly conceived, clearly not revenue neutral and foisted upon lawmakers with little input.
The fact remains, however, that when economic conservatives in the Legislature had the chance to implement trickle-down economics, they lost their nerve. They blinked because they feared it wouldn’t work. Republicans seemed to say, “It makes for a nice theory, and it’s useful when attacking Democrats, but don’t expect us to enact this crazy idea.”
Legislators in Kansas were not so sensible after that state’s Republican governor, Sam Brownback, proposed a series of bills in 2012-13 to slash state taxes. The result? State revenue collections collapsed. It’s now so bad in Kansas that Brownback and Republicans are pushing tax increases to preserve critical services.
Anyone with a passing knowledge of recent American history would have known that Brownback’s plan would flop. President Ronald Reagan persuaded Congress to enact his supply-side tax cuts in 1981. A few short years later, as the federal budget deficit ballooned, Reagan reversed course and raised taxes.
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