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Travis Rowley: Time for a Right-Wing Experiment

Saturday, January 12, 2013

 

“One of the best ways to get the economy going even greater than it is right now is to put more money back in the hands of consumers and more money, in particular, in the hands of small business." – Governor Scott Walker, Republican

Just a few weeks ago I wrote that Senate President Teresa Paiva Weed (D), despite her promises to the contrary, “has no intention to fix the state’s economy. There’s simply no political reason for her to do so.” The power base of her political party – progressives and unions – are the very people who have a stake in maintaining the state’s status quo.

And it wasn’t too long ago when I challenged several local progressive voices, who seemed to concur that the RI Democratic Party was more conservative than liberal – a calculation based on the fact that Ocean State Democrats had lined up behind measures such as pension reform, Voter ID, and a reduction of the top state income tax rate to a level that was even with Massachusetts and Connecticut.

After making the point that pension reform and Voter ID legislation simply amount to good-government and financial responsibility, not conservative theory, I also remarked that “tinkering with a progressive income tax is not conservatism. Conservatism would be the complete elimination of the state income tax – along with the estate tax and corporate tax. [Progressives have] no idea.”

Lo and behold, this week we have seen Governor Bobby Jindal (R) propose the “elimination of all Louisiana income and corporate taxes.”

Jindal isn’t the only Republican governor trying to make life easier on productive citizens while DC Democrats continue to stifle the national economy with tax hikes, ObamaCare, and other government cancers. This week Governor Scott Walker of Wisconsin vowed to sign a budget that will implement “significant” income tax cuts while Governor Bob McDonnell proposed making Virginia “the first state in the country without a gas tax.”

Is it really any wonder that the “unemployment rate [has] dropped in every state that elected a Republican governor in 2010”? Is it any surprise that, of the top ten states in CNBC’s 2012 study of state business climates (the one that ranked Rhode Island dead last), seven “have both Republican governors and legislatures”?

Republican governors also represent seven of the ten states with the lowest unemployment rates in the country. As the Republican Governors Association boasted, “Over the most recent 12 months available, Republican governors have added 1 job per every 179 state residents in their states while Democrats have added 1 job per every 227 state residents.”

An Examiner.com analysis tells a similar story: “In 2010, influenced by the Tea Party and its focus on fiscal issues, 17 states elected Republican governors…Every one of those states saw a drop in their unemployment rates since January of 2011.”

And I’m suddenly reminded of something else I wrote several months back: “Both political parties” – especially at the state and local level – “are not the same.”

Which Tax to Kill?

The RI Republican Party has called for a major tax reform of its own. After the publishing of a convincing report by the RI Center for Freedom and Prosperity, Statehouse Republicans followed up by calling for the elimination of the state sales tax.

While I’m sympathetic to the RIGOP’s cause, Jindal’s plan seems superior. After all, there is nothing more powerful than abolishing taxes that serve as disincentives to work – the moral activity that should be a primary condition for sustenance.

Progressives tend to disagree (which only boosts my confidence that I’m right). According to them, the sales tax represents “regressive taxation” – taxes that disproportionately affect the poor. And Louisiana will likely have to impose “increased sales taxes” in order to make Jindal’s tax-cutting measure “revenue-neutral.”

It is truly amusing to witness Rhode Island progressives make such an argument, because while Rhode Island (a state under their control) has one of the highest sales tax rates in the country, the RIGOP is sure to discover zero allies from the political Left in their quest to eradicate it.

Just more evidence that progressives don’t really care about the poor. Rather, they care about establishing a permanent and ever-expanding underclass of political constituents. They care about prolonging their reign as long as they can, which – to them – means holding on tightly to every current government revenue stream. With a kingdom as fragile as theirs, progressives don’t need anyone to propose any bold initiatives. Or make any sudden movements!

So it’s simply by accident that progressives are correct in this instance; keeping the sales tax in place as a government revenue stream does make the most sense (as long as we’re talking about eliminating some form of taxation). Conservatives, however, are the ones who understand that there’s nothing more beneficial to the economy than allowing people to keep every penny they earn.

Capitalism

By not taxing the productivity of individuals and their businesses, these costs would cease to be passed on to the consumer via price increases. In other words, the elimination of income and corporate taxes effectively offsets the sales tax as well.

Even more simply understood, keeping more money in people’s pockets also compensates consumers for a hike in the sales tax. It also serves as economic stimulus, while encouraging evermore productivity. Because the government doesn’t take money from shop owners in order to hand money to their potential customers, both parties benefit from the fruits of their labor – and therefore decide to labor again.

We don’t need stimulus plans. Capitalism is stimulus.

Moreover, under Jindal’s plan to abolish the income and corporate tax, people’s overall tax rate is increasingly left up to them, as they become more cautious consumers. And the more power that is placed in the hands of the people – and taken away from the government – the better.

Right, liberals?

Lastly, income and corporate taxes translate to business expenditures that, if eliminated, would alleviate the pressure placed on corporations to burden their workers with wage and benefit cuts. And the anticipated relocation of corporations and capital that such measures would cause can only result in an increase in competition for the local workforce – which translates to even more upward pressure on wages.

Better jobs. More jobs. Less people on government welfare. And now the initial proposal to abolish the income and corporate tax isn’t forced to be “revenue-neutral” at all, because the need for a welfare state is suddenly being diminished.

And now Democrats are really getting pissed off.

Only Republicans

Liberals can dismiss the above economic narrative as free-market hogwash all they want. But the fact of the matter is that governors who are guided by such thinking “saw their unemployment rates decrease at a faster clip than states that elected Democrats.”

Simply put, there are places that operate by this capitalist code. And they’re not the Hell-holes that progressives would have you believe they are. In fact, they are the places that Rhode Island is losing its population to.

At the bottom of the economic barrel, Rhode Island can only be described as a left-wing experiment. So what would be the harm in conducting a right-wing experiment – a reversal of everything Rhode Island has stood for during the past 70 years?

It’s simply unfortunate for Rhode Islanders that Republicans are the only ones armed with the superior ideology and political will to pull such a trigger.

 

Travis Rowley (TravisRowley.com) is the author of The RI Republican: An Indictment of the Rhode Island Left.

 

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Comments:

Q. What scares the crap out of Big Central Government types?

A. States lowering taxes and taking other actions that remove burdens from individuals and enable freedom to flourish.

Collective misery is the way these types believe they'll build and maintain centralized control, and create the revenue streams that sustain their bureaucracy. They certainly don't like states taking the initiative to break away from their control and mandates. (Witness 27 or so states that are refusing to set up health insurance exchanges on their own.)

People of all political stripes lose their ideology when it comes to individual prosperity -- they move to where jobs and opportunities are allowed to flourish. That RI is losing population seems to prove this point.

Good article, Travis.

Comment #1 by Art West on 2013 01 12

"Capitalism is stimulus." Right.

Comment #2 by Kevin O'Connor on 2013 01 12

Kevin,

Is the obverse the right way to proceed? Is socialism stimulus? Or is there some middle way that would create jobs and strengthen RI's dismal economy?

Comment #3 by Michael Byrnes on 2013 01 13

RI is sinking fast!

Comment #4 by anthony sionni on 2013 01 13

"Simply put, there are places that operate by this capitalist code."

Yes, like that workers paridise, Dubai. Perhaps the place for you, Travis.

Comment #5 by Russ C on 2013 01 14




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