Tax-cut irrationale #3

Today's E.V. Tribune printed another opinion piece from Goldwater Institute economist who thinks we need to cut taxes instead of investing the money in services to support growth. Titled "Gift that keeps giving: Eliminate income tax," Noah Clarke argues we need tax cuts to stimulate Arizona's economy.

"Arizona's best economic interest lies in returning surplus funds to taxpayers," Clarke writes. "A permanent reduction in the personal income tax rate will expand private enterprise, entrepreneurial activity, increase employment, and raise wages." In other words, cut taxes and the benefits will trickle down throughout the economy. Arguing trickle-down economics is another academic discussion, but for the sake of proving their point as short-sighted, let's assume the tax cuts DO what he says. What does that mean?

Let's say that Arizona's population grows at the rate ASU predicts, which is doubling to 11.2 million people by 2030. That's an average of 224,000 people per year. Let's say further that of those 224,000 people, there is a husband, wife and two kids. So that's 112,000 kids that will need seats in schools. That 112,000 families per year that will want home, water, sewer, and waste services. That's 112,000 families that will want police protection, want fire protection, want parks, want sports facilities, and need roads to drive to them.

He says lower tax rates could create one new firm for every 303 people. Okay, so that's 739 new businesses per year, each of which will increase demands for commercial office space, who wil then, too, need employees, and will demand the same services as families. Like so many conservatives, Clarke can't think ahead. He thinks all of these funds will come from future tax receipts and will be in place at just the right time.

The problem is all of these will be required as they arrive. There is no lag time.

He also makes the ridiculous comparison of Arizona's income tax-based government with Nevada's. Yes, there's no income tax in Nevada, they don't need one. They have casinos. Is Clarke suggesting Arizona become another haven for casinos? If not, then the argument is simply irresponsible and nonsensical. The basis of these economies are not the same. Never were, never will be.

The belief that government cannot possibly use the money for the betterment of society is about as specious an argument as one can make. Government investing in the future is no different from families investing in their future. It's the right thing to do.