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From: Doug Logan
Received: Dec. 19
On Dec.18, The Republic ran two items that highlighted just how detached from reality the political party that holds the reins at the Indiana Capitol has become. On Page 4, we read of a leader’s plan to tour the state talking up his idea that cutting taxes for campaign contributors, I mean, businesses, will promote economic growth.
A couple of pages later there was a wire service piece about how a survey of economists sees that the increasing richness of the rich is preventing growth.
The second article was no surprise. After all, anybody who already has more than he knows what to do with is not going to spend another tax break. Honest economists have known that for years. The rich do not spend the benefits that their friends in government pass out, they just put more money in the hedge fund. Or maybe they donate to foundations for improving the lives of South Atlantic islanders. Neither outcome does the national economy a great deal of good.
The first article was no surprise either, more’s the pity. That a certain political party has not learned yet that legitimate economists debunked the Laffer, or should I say Laff-able, Curve, decades ago. Yes, the Gipper’s treasured trickle-down sound bite is, and always was, a myth.
It should be obvious that the way to promote economic growth is putting money in the hands of people who will spend it. Business investment will follow — when producers build capacity to fill demand. Spacely Sprockets will build a new sprocket factory when the company can sell more sprockets, and no amount of tax breaks will make Mr. Spacely invest any sooner. Conversely, the lack of tax breaks will not keep Cogswell Cogs from building a new factory when customers are buying more cogs.
I encourage everyone to let the politicians know that we see how they are trying to rig the game. Calling benefits for wealthy business owners “economic development” is a sham. Tax giveaways are a thinly disguised attempt to encourage “give-ees” to contribute to the political campaign funds of the givers.
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