It’s not taxes, but Republican myths about them, that hurt Louisiana

By Robert Mann

It’s one thing to say taxes are too high. That’s a subjective judgment dependent on what you believe the government should provide. It’s quite another thing to argue tax increases always destroy jobs or that tax cuts reliably create more of them.

If you make that assertion, you should have more evidence than faith. Unfortunately, those pitching tax cuts as an elixir for state economies are selling snake oil.

The perennial struggle over taxes is now playing out in Baton Rouge. In particular, legislators are debating Gov. John Bel Edwards’ plan (the centerpiece of which is dead) to reform Louisiana’s antiquated tax system and replace the $1.4 billion in temporary tax increases lawmakers passed last year.

Opponents — mostly Republicans — object to any tax increase, especially on business. Unfortunately, the governor’s ill-fated plan conflicted with two tenets of Republican orthodoxy: Tax increases are always bad, but business taxes are even worse because they kill jobs.

“If the business community is forced to pay additional taxes to maintain the current or even higher levels of government spending,” the Louisiana Association of Business and Industry (LABI) asserts, “we will have fewer resources available in the private sector to continue to create jobs, invest new capital in our businesses, and make the other necessary investments for them to grow and expand the private sector.”

One problem with this tax phobia is that GOP ideology about raising revenue keeps crashing into reality. Maybe Louisiana Republicans and LABI suffer from short-term memory loss. It wasn’t long ago that lawmakers slashed personal income taxes by $800 million a year and showered businesses with billions in credits and exemptions.

Did I miss the unprecedented economic boom that blessed our state? Last I looked, we had the nation’s fourth-highest jobless rate — 5.7 percent.

So, is Louisiana’s high unemployment caused by excessive business taxation? Probably not. In fact, of the 12 states with the highest business taxes, all but Alaska (which, like us, suffers from low oil prices) have lower unemployment rates than Louisiana.

The jobless rates in some of these high-tax states are much lower than Louisiana’s. For example, Iowa has the highest corporate tax in the country — a top rate of 12 percent compared to Louisiana’s 8 percent — but its 3.1 percent unemployment rate is almost half Louisiana’s and the eighth-lowest in the nation.

Continue reading on NOLA.com at this link.

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4 Responses to It’s not taxes, but Republican myths about them, that hurt Louisiana

  1. Stephen Winham says:

    These are facts, not theories. However, the anti-tax crowd has never let facts get in the way of ideology. 98% of Trump supporters would vote for him if the election was held again today. A large percent of those same people believe it is okay for him to lie because the media lies about him all the time anyhow. How can facts possibly intrude on such mindsets? The laughable Laffer Curve exists but it has been proven to be very shallow indeed. It would appear, however, we are now all expected to believe in it fully.

    Liked by 1 person

  2. Michael Wade says:

    The lower taxes on business and other wealth equals job creation is a long-standing myth which no advocate can support with historical data. The nonpartisan Congressional Research Service, at the request of Congress, researched the issue back in 2011, and produced a report which said that the argument could not be supported with the existing historical evidence. The report was squelched before it could be published prior to the 2012 election. Where indeed are all those jobs that all of those tax breaks and subsidies were supposed to produce in Louisiana? Supply-side economics (and the Laffer Curve, indicating that tax revenues would increase as jobs were created, first saw daylight on a napkin in a restaurant over drinks–how’s that for careful thought), was just a rehashing of the late 19th century social darwinist theory of trickle-down economics, which proposed that leaving the corporate and individual wealthy untaxed and unregulated, with them making the decisions, would produce an economy which benefited everyone else). Economic recovery after 2008 has been most healthy in those states which increased taxes on the more fortunate and closed loopholes. As they say, you could look it up. At this point, only the deeply ignorant, the bought and paid for, and congenital liars would advance such an argument when tax policy is brought up for consideration. What afflicts Louisiana, and Americans, now is that the ignorant, the bought, and con men control the legislatures, the Congress, and the White House.
    The other problem is that voters have largely been conditioned to believe all of the misinformation they are daily bombarded with, and they are afraid to take a chance on anyone who has rational, solid ideas about how to do better.

    Liked by 1 person

  3. Matthew Walton says:

    Taxing production is immoral. All taxes should be levied on consumption. Those with more disposable income will spend more, and thus pay more. Taxation should be used to fund basic govt services, not to punish hard work and success, so the only “fair” way to tax is equally, as opposed to “progressively”. At the same time, theft and redistribution schemes like the EITC and allowing refundable credits past total tax liability need to end immediately. The state has no right to take from one and give to another like some Robin Hood fantasy without the moral equivalence. Charity should be a function of communities, not governments.

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