State Senator Kathleen Vinehout wrote a column in the Tomah Journal recently. It debunks the conservative talking point that lower business taxes are a cure-all for everything that ails us. Conservatives have relentlessly parroted the talking point so often that some just accept it as fact without even looking at the actual data. The right wing has also changed the meaning of a ‘good business tax climate’ from one that is simple, fair, and transparent to one that basically doesn’t exist at all.
In her column, Senator Vinehout exposes conservative groups, like the Tax Foundation and its Tax Climate Index. She correctly points out that it only measures the level of taxes but fails to give a more complete picture by including the economic growth of each state. Do the states with the lowest business tax actually bring economic growth and prosperity? Vinehout tries to answer that question by comparing the Tax Foundation’s ratings with the latest growth rates in state gross product. Here are just a few of Senator Vinehout’s findings:
California, one of the 10 ‘worst’ tax states, has a higher annual average growth rate than its neighbor Oregon, which is one of the 10 ‘best’ states.
New York, one of the 10 ‘worst’ tax states, has a higher annual average growth rate than Delaware, one of the 10 ‘best’ states.
The two states with the highest average annual growth rates, Arizona and Idaho, both rank in the bottom half of all states when it comes to their ‘business tax climates.’
Clearly this data does not support the idea that low taxes automatically translate into a growing economy. Many things enter the equation when businesses are attracted to an area or a state. Blind acceptance of right wing ideology may benefit a few very narrow interests but it does not make productive policy or benefit our state as a whole. For that one can only rely on reality and a common sense approach over the simplistic tax talking points being repeated so often on the right.