07 July 2006

Econ 102

Every now and then the childish zealots at the Strib let a good one get through:

I bring a message of hope and absolution for the high-income Minnesotans who have called for a tax increase on themselves. Their proposal is designed to meet what they perceive as the need for more government revenue to fund more government spending. However, it won't work.

Raising income taxes doesn't generate more government income. It lowers it. The answer is not to raise taxes, but to lower them.

Facts are facts. Despite last year's projections that Minnesota would once again face a deficit, we are running a surplus, while at the same time our state no longer ranks in the top four or five in per capita taxation but has dropped to 16th. In Rhode Island, about a blue a state as you can get, the top tax rate has been cut from 9.9 percent to 5.5 percent, and the state has gone from the third-highest individual income tax rate to the 27th. According to William Murphy, the Democratic House speaker, to the business leaders who choose where their companies move and create jobs, the tax rate makes a big difference.

In New Mexico, Democratic Gov. Bill Richardson has cut the top income tax rate in half. New Mexico now has a half-billion-dollar surplus and has seen tax revenues increase by 27 percent this year, faster than any other state in the union.

Yes, it's counterintuitive to claim that lowering taxes increases tax revenues. But it does, not only because it attracts more businesses and jobs. It's also because the more money people have to spend on themselves rather than have confiscated by government, the more those dollars circulate to generate greater demand for goods and services, the more jobs that are created to supply those goods and services and the more income that is spread among more people -- and thus, more tax revenue.
So let's all shed a tear for the rich and guilt-ridden, and continue cutting taxes.


More and more the thing that defines today left is their desperate clinging to what's broken. They want gun control, yet it never reduces crime. They want generous welfare programs, but they have never made a dent in poverty. Public school is the only K-12 education solution offered, yet these schools continue to decay from the inside, and they lust for aggressively progressive tax rates in order to soak the rich when this approach never fattens government coffers. All these failed concepts have been chapters in the lefty bible for decades, yet they still salute when any are run up the flagpole come election time.

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