Kansas elected one of the most conservative people alive as their governor. Sam Brownback. Today, Kansas’s bond rating was dropped a level due to increased income tax cuts. Riding in on the promise that cutting taxes creates prosperity, Brownback has found that isn’t necessarily so. Kansas is lagging in comparison to five nearby states in nearly a dozen key measures associated with employment and business expansion…
Decline comes from cutting taxes and pushing a pro-business agenda. And the answer why is pretty simple. You see, when you just give people money they don’t have to work for, corporate welfare, they become lazy. Why should they open a new plant? They can just buy out a competitor with all the new money they have, pay for it by cutting staff, and increase margins.
Cutting taxes provides incentive to cut jobs, not hire new ones. Business-television salivates when companies buy each other out. (Ok, their stock do prices rise). But once the acquisition takes place, the firings begin; half of the corporate presidents have to go; half of the vice presidents have to go; half of the secretaries have to go; half of the administration, has to go.. So too much money handed to businesses, cost society jobs. Someone gets wealthier, but they don’t spend that wealth, they just park it. And who can blame them. With stocks rising due to the Fed’s free money, If one can make 20-25% per year as in 2013, why would they invest in a plant that only breaks even 10 years from now?
Now, on the other hand, in those states with higher tax rates,.. if you keep your money, you lose it… to taxes. That provides incentive to bury your money inside your own business. Bury it as in making necessary repairs, upgrading, expanding, research and development, all of which increase the worth of your business, should you ever sell it. In other words, businesses do not serve their first role as a primary means to make money, but instead they become the way to hide or bury ones money and shield it from taxation and store it for when you might need it at some later date..
Consequently, when you spend in Research, and hire all bright people, you just might stumble upon a new concept that is also economically viable. Across this past decade of Bush tax cuts, research into cures for diseases have dropped, research into making better products have dropped, and research into developing new ideas, have dropped…. Across America, business costs allocated to research and development have been scaled back.
This hurts all of society for the gain or one or two people at the top. Unless reversed, we too face the prospect of Kansas who elected a Tea Party Governor as did Pennsylvania. In both cases, doing what the Tea Party says should be done, not only did not work, but worked the opposite way than it predicted. Cutting taxes and deregulating businesses, hurts the economy more than it helps…
Kansas, Wisconsin, Florida, Pennsylvania, Tennessee, Ohio, formerly prosperous, all elected Tea Party Governors… All are growing slower out of the recession than surrounding states who didn’t…
The point is, voters gave several states experimental leeway to try their new approach in the 2010 elections… every one of those states has failed. For those of us who understand the differences between myth and realities, this comes as no surprise. For the rest, you should be asking yourself if we can truly afford another 4 years of pursuing myth followed by finger pointing over the failures each myth-pursuit has caused, or if not,… vote for someone who will simply raise taxes on the rich. Do that, and the boom times return…..
(btw, Delaware Growth was just ranked 13th by Business insider (better than 37 other states)
Leave a comment
Comments feed for this article