Tax Cuts: A Bad Idea Revisited
July 31st, 2015
While Mississippi politicians continued stumping at the Neshoba County Fair for state income tax cuts benefiting corporations and the wealthy, elsewhere, a national tax policy expert recounted the numerous times tax cuts have failed to live up to their promises of economic gains.
William Gale, Co-Director of the Brookings and Urban Institute’s Joint Tax Policy Center, gave readers a history lesson on failed tax cut proposals with his recent piece “State income tax cuts: Still a bad idea.”
As we have outlined before, major tax cuts in Kansas, Louisiana, North Carolina, Wisconsin, and other states have not been the boon to their economy that was promised, have cost more than expected leading to big cuts in education at all levels and downgraded credit ratings, and have eventually resulted in tax shifts that harms working families.
Gale writes: “The states have no good reasons to believe that tax cuts will bring the desired manna. Yet they continue to erode their tax bases in the name of business growth during an era in which few states can afford to cut critical services ranging from education to infrastructure repair. Some ideas live on and on, no matter how much evidence accumulates against them. States that follow them do so at their own peril.”
During this past legislative session, lawmakers wisely rejected drastic income tax cuts that would have further depleted state funding for education and other priorities that support economic growth and working families. Let’s keep these failed proposals on the shelf where they belong.
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