In his inaugural address, Barack Obama quoted the Apostle Paul, saying we need to put away “childish things” — including the divisive ideologies of left and right. Obama promised to focus on what works rather than what adheres to either a liberal or conservative party line.
One of those childish things that we need to put away is the idea that tax cuts always promote economic growth and investment and that our problems can be solved if we shrink government to the point where it can be “drowned in a bathtub” (in the immortal words of right-wing pundit Grover Norquist).
Gov. Tim Pawlenty apparently didn’t get the memo. He’s still holding valiantly to his “no new taxes” pledge, like the captain of a ship crying “stay the course” while he’s steering toward an iceberg. He announced in his State of the State address that he’d like to deal with our $5 billion deficit by cutting corporate income taxes in half — supposedly to put us on par with other states.
There are two problems with the old saw that Minnesotans — and particularly Minnesota businesses — are high on the list when it comes to taxation.
First, it’s not true. According to a study cited on the website of Pawlenty’s own economic development department, Minnesota was ranked 41st in the nation in business taxes as a share of profits. That’s right, 41st.
Second, even if it were true that Minnesotans are taxed at a higher-than-average rate, it wouldn’t matter. Something about Minnesota’s historic tax system seems to work, considering that our state leads the region in almost every quality of life measure and leads the nation in many. Our economy always outperforms that of our neighbors; our life expectancy is second only to Hawaii’s; education, the arts, professional sports, healthcare, parks and recreation — all have been first rate. And we’ve done it on the frozen tundra, which requires higher spending by government just to keep our breath from freezing indoors and our roads passable in winter.
It’s not just Minnesota. On average, the so-called “high tax” states (which happen to be blue states) have better quality of life than the “low tax” states, yet Gov. Pawlenty apparently wants us to adopt the taxation schemes of Mississippi and Alabama.
Jeff Van Wychen of Minnesota 2020 makes a related point: “According to the Tax Foundation, the 2008 ‘tax freedom day’ in Minnesota will fall on April 27 — the eighth latest among the 50 states. But guess what? Despite our late ‘tax freedom day,’ Minnesota has the 14th highest after-tax income in the nation. In general, states with late tax freedom days tend to have higher after-tax income than states with early tax freedom days.”
In the early days of George W. Bush’s administration, conservative pundits had fun referring to themselves as the “grownups” and liberals as the starry-eyed idealists. It turns out that the real dreamers are the die-hard conservatives who think an anemic government and laissez-faire economics can work in a complex age such as ours, with economies that no one understands and global problems that the markets not only can’t address but actually exacerbate.
Gov. Pawlenty and his followers in the Taxpayers League and the Republican Party hold on to the bromides of the Reagan revolution like Charlton Heston held on to his guns — even though a rollback of regulations gave us a financial crisis, and unwise tax cuts created massive deficits and debt, and a bombastic foreign policy gave us two costly and unwinnable wars.
To misquote that conservative icon: You’ll have to pry their ideology from their cold, dead hands.
Brett Larson (email@example.com) is the editor of the Mille Lacs Messenger.