We got to lower taxes in order to encourage job growth and if we go down the road of higher taxes then we will go further into a recession.
I wrote last week about the destructive and self-defeating impact of high state taxes. Simply stated, when states such as California, Illinois, and New York get too greedy, the geese with the golden eggs fly across the border.
And that was one of my main points in this CNBC debate about state governments and class-warfare tax policy with Jared Bernstein.
Since you never get the opportunity to make all your points in an interview, here are a few additional thoughts.
- Jared admits that tax rates can get too high, but then he claims that the Laffer Curve only exists “in the heads of people like Dan and Arthur Laffer.” Those are mutually inconsistent statements.
- Jared seems to think it’s important that big business is siding with big government in Oklahoma and supporting the income tax. But that’s hardly a surprise since large companies often prefer corporatism.
- Jared actually cited Massachusetts and New Jersey as low-tax states, a point that even the host thought was a bit kooky. I guess this means France is a low-tax country in Jared’s fantasy world.
But I also think I made a mistake. When asked how states can get rid of their income taxes, I mentioned that sales taxes do less damage – per dollar raised – than income taxes. That’s true, but I should have stated first and foremost that states should reduce the burden of government spending.
One final point. This cartoon shows what eventually happens in a tax-and-spend society.
P.S. Jared was the co-author of the infamous study claiming that Obama’s so-called stimulus would keep the unemployment rate below 8 percent. Look at this chart and draw your own conclusions.