Kasich’s tax hike–in coordination with similar schemes in Nebraska, Kansas, Louisiana, North Carolina, Virginia, and basically every GOP-controlled state–is clearly part of a national plug-and-play strategy led by ALEC, based on a failed Missouri idea.
Each year since 2007, ALEC has published Rich States, Poor States by (no joke) Arthur Laffer. It’s a right-wing guide to state awesomeness (not including per capita income), defined as low per capita tax revenues. It doesn’t include in its equation tourism taxes or severance taxes, so it (of course) ranks oil-rich states with lots of tourism as being the most efficient states. It then tells states with little oil or tourism that they should adopt tax policies akin to the “most efficient states”.
Yes, it’s that dumb. Alaska has no income tax because they have lots of oil to tax. If Ohio wants a budget like Alaska’s, we’d need to have lots of oil–not a lower income tax. And no, having a low severance tax will not give Ohio more oil.
The goal was to make Missouri’s budget more like Tennessee’s, not with a “have the Tennessee Valley Authority in your state” strategy but by adopting a tax structure that Tennessee doesn’t even have (per Progress Missouri). Yes, it’s that dumb.
It was introduced as SJR 29 in 2011, which died quietly under opposition from the hippies at the Missouri Association of Realtors. It then morphed into a ballot initiative, which failed to make the 2012 ballot.
It was a fringe idea that was opposed by Gov. Jay Nixon, who cruised to reelection last year. The bill’s sponsor is no longer in the Missouri Senate. And it has somehow morphed overnight into the main focus of the national Republican party.
I don’t want to be a concern troll, but this idea was deeply unpopular despite heavy funding in a far more conservative state with far fewer retirees. It was opposed by the Chamber of Commerce, seniors, and all Democrats.
Does the Governor really think low-income voters won’t come out to lower their taxes in a referendum? As a great conservative political thinker once said, “Go ahead, make my day”.
The first edition of RSPS was opposed to sales taxes. They focused on a Cook County, IL, increase in sales taxes to 10.25%, saying that it would drive retail spending to Lake County because of the effects of the Laffer Curve. That didn’t happen, so rather than rethink the Laffer Curve they just omitted that part from later editions. Intellectual rigor!
What Chicago’s sales tax history shows (the increase has since been mitigated because it raised too much money) is that it’s very hard to predict the effect of tax incentives. And yet Kasich is taking us all-in on the unsupported concept that cutting taxes on rich people will cause there to be more rich people, and raising taxes on seniors will cause there to be more young people.
It’s time for reporters to ask Kasich if he thinks taxing poor people will make them rich, or make them leave the state.