| February 13, 2012
‘The penalty of leadership’
What the Cadillac Motor Car Company understood nearly a century ago remains true today: “Long, long after a great work or a good work has been done, those who are disappointed or envious, continue to cry out that it cannot be done.”
Dr. Arthur Laffer [pictured here with President Ronald Reagan], a member of President Reagan’s Economic Policy Advisory Board, is a world-historical figure who helped trigger a worldwide tax-cutting movement in the 1980s and helped President Reagan make it “morning in America” again. In a new report, he shows how Oklahoma policymakers can usher in a new day of economic freedom and prosperity.
Unsurprisingly, some folks are just as hostile to freedom and to Dr. Laffer today as they were during the Reagan years. Chief among the naysayers are the folks at the Institute on Taxation and Economic Policy (ITEP), an ideological think tank which has been funded by President Obama’s favorite liberal billionaire, George Soros. (When we last heard from ITEP, they were referring to some of Oklahoma’s leading job creators as “corporate tax dodgers.”) Disappointingly, a left-wing think tank in Oklahoma, the Oklahoma Policy Institute, has chosen to highlight ITEP’s criticism, including some silly accusations concerning population growth and income growth.
They don’t seem to realize that income growth is not the same thing as population growth (there are inter-relationships, of course, but that’s the point). A key part of Dr. Laffer’s nine-state analysis is that people and businesses move to states with pro-growth tax environments. (High taxes even managed to drive Dr. Laffer himself from the sandy beaches of the sun-splashed Golden State to no-income-tax Tennessee.) Yes, population flows help top-line GDP grow faster, but they create an offset for GDP per capita. The same is true for the states from which people are leaving—income growth on the top line falls, but because there are fewer people, the per-capita GDP growth benefits.
Contrary to the Left’s accusations, there are many studies (here, here, here, here, and here, to name just a few) which show that high taxes reduce economic growth.
There is nothing new under the sun. President Reagan and Dr. Laffer fought these battles in the 1980s, and visionary leaders like Gov. Mary Fallin and certain state lawmakers must be prepared to pay “the penalty of leadership” as they fight them anew in the weeks and months ahead.
On one side of the battle is what OCPA’s Brandon Dutcher has dubbed the Vast Left-Wing Kleptocracy—state bureaucrats and taxpayer-funded private organizations which take your money and use it to lobby for more of your money. Buoyed by left-wing think tanks that love Obamacare and the “Stimulus” every bit as much as they dislike tax cuts, these tax users even have someone to organize their efforts, and they already have most journalists in the state-capitol press room on their side.
On the other side are the people of Oklahoma—the voters who elected a conservative governor and state legislature in large part out of disgust for everything Mr. Obama and his allies on the Left have done to our country.
The simple truth is that conservatives are winning the battle of ideas. People like Arthur Laffer, Gov. Mary Fallin, and bold state lawmakers are stepping up and casting a vision that will make Oklahoma a “city on a hill.” The Left is late to the party, and has yet to offer its own plan for growth. Apparently it has no plan other than its usual menu of more taxing, spending, and regulation.
Phasing out Oklahoma’s income tax is a great work, and it can be done. If the Oklahoma Policy Institute is going to challenge Gov. Fallin’s bold, transformational leadership, and challenge those of us seeking to promote economic freedom and prosperity, they’re going to have to come up with something far more convincing than ideological drivel offered by Barack Obama’s allies.