ALEC Takes Aim at Tennessee Tax Policies



Were guessing this might also be on the reading list.
  • Ross Hunter
  • We're guessing this might also be on the ALEC reading list.
The American Legislative Exchange Council has released (for free!) on its website a blueprint for economic destruction prosperity that takes special aim at Tennessee.

Titled "Rich States, Poor States," the 112-page supply-side manifesto was authored by none other than Arthur Laffer (godfather of trickle-down economic theory), Wall Street Journal pundit Stephen Moore and ALEC's own Jonathan Williams. Together they take Tennessee to task for its dreadful, job-killing estate and gift taxes.

With 44 Tennessee legislators tied in some fashion to the pro-corporate legislative factory, it's little wonder that the legislature recently passed bills that would end both estate and gift taxes. Some people might call this "synchronicity."

While other, more knowledgeable sources have critiqued the bunk methodologies ALEC employs in this annual report (including ALEC's patented "15 variables" metric, which ranks the Volunteer State 12th in the nation for "state economic outlook"), the report is also noteworthy for employing some pretty damn funny apologetics to describe a variety of hostile behaviors.

For example, why wealthy people don't like paying taxes:

The ideal goal of the tax code is to raise the funds necessary to run government. Unfortunately, in today’s world, tax policy has many additional goals, including (but not limited to): Redistributing income, rewarding favored industries, and punishing behaviors that the government deems undesirable. Despite this greatly expanded tax mandate, finding an appropriate tax code would be relatively straightforward if only people would stop changing their behavior in response to changes in the tax code. It’s like dodgeball; if only the other guy wouldn’t duck when you threw the ball at him, then it would be easier to win. However, the other guy does duck, and he almost always ducks just when you’re throwing the ball at him. In this sense, dodgeball and tax policy have a whole lot in common.

Imposing high tax rates on a narrow tax base is undesirable for many reasons. They produce disproportionately large distortions and thereby seriously damage the economy while yielding little direct tax revenue. High tax rates are direct incentives for people to evade, avoid, or otherwise not report taxable income.

While the quip about "redistributing income" is laughable in light of paltry capital gains rates that permit a corporate parasite like Mitt Romney to pay less taxes than his chauffeur, the real comedy lies in the dodgeball analogy. If Uncle Sam taxes you too much, it's your patriotic duty to put your money in a bank in the Cayman Islands because, after all, it's a game!

The report reads as if the authors occupy a parallel dimension where their policies never resulted in soaring deficits, social unrest and national ridicule — but then, that description applies to the state's legislature, too.

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