The states. Where Republicans are really making things happen.
While John Boehner and Mitch McConnell are firing shots at conservative organizations for criticizing the latest GOP punt on fiscal policy, let's see what's happening in statehouses across the country - particularly in Paul Ryan's home state of Wisconsin.
Scott Walker, who already went to war with public employee unions and won concerning collective bargaining rights, isn't resting on his laurels. He's now taking a serious look at eliminating Wisconsin's state income tax - a move that would put Wisconsin on a par with economic strongholds like Texas and Florida. The conversation is beginning well in advance of the next budget cycle because Walker wants to have a clear sense of the fiscal and economic implications before he brings the idea before the Legislature. WisPolitics.com has more:
"There are many states that do very well, better than most states in the country, that have noincome taxes ," Walker told reporters during a stop at his Northern Economic Development Summit. "That's one thing for us to look at. Is that feasible? What would that mean in terms of an economic boost? That's not only for individuals, but small businesses in this state."
Lt. Gov. Rebecca Kleefisch and Revenue Secretary Rick Chandler last week had the first of their roundtable discussions on taxes. Chandler said Monday those discussions are to get input from the public on what they're interested in as well as what's best for job creation. He said that could be changes to the income tax code orproperty taxes .
"We want to look at areas where we may not stack up well against other states, where particular aspects of our tax code may be out of line with other states," Chandler said. "We want to get the overall burden down, and we want to make all elements of the tax code as competitive as possible."
Democrats like income taxes, of course, because they can be used very efficiently as instruments of redistribution. Walker isn't yet saying how he would otherwise restructure the state's tax code to compensate for the loss of income tax revenue (assuming he would at all), but one obvious step would be an expansion of the state sales tax. Sales taxes, of course, are less prone to politicians' manipulation, which is why Democrats don't much like them. You can exempt certain things - like groceries and medicine - but you can't build in the same myriad of complications that are possible with an income tax.
And of course, the best argument against income taxes is that they serve as a disincentive against earning, whereas sales taxes encourage savings and discourage consumption. That's a dagger in the heart of Keynesians who think consumption alone drives economic growth. They prefer to impose punative income taxes on the rich and redistribute the income to those who earn less on the theory that they will spend the money on their needs and all this consumption will drive growth. That's why they're demand-siders, because they think demand leading to consumption creates wealth. We're supply-siders because we believe production adds value and creates wealth, thus making it possible for people to consume what represents value to them.
But not to get so esoteric here, Scott Walker continues to demonstrate he is the type of policy leader who should be setting the agenda for the Republican Party, while our leaders in Congress once again line up to punt, hoping they can somehow position themselves to pick up the pieces once it's clear to everyone that the Democrats have run the country into the ground.
Call me crazy. I like Walker's approach better.
No comments:
Post a Comment