Cut taxes or build education — 2 states are ideological test cases

Martin O’Malley and Sam Brownback

As state governments begin to emerge from the long downturn, many are grappling with a difficult choice: should they restore some of the services and jobs they were forced to eliminate in the recession or cut taxes in the hopes of bolstering their local economies?

Maryland, a state controlled by Democrats that has a pristine credit rating, raised income taxes on its top earners this year to preserve services and spending on its well-regarded schools…Kansas, controlled by Republicans, decided to try to spur its economy with an income tax cut — which Moody’s Investors Service, the ratings agency, recently warned would lead to “dramatic revenue loss” and deficits that would probably require more spending cuts in the coming years.

Gov. Martin O’Malley of Maryland…asked. “How much less do we think would be good for our country? How much less education would be good for our children? How many fewer college degrees would make our state or our country more competitive?

“How much less research and development would be good for the innovation economy that we have an obligation and a responsibility, a duty and an imperative, to embrace? How many fewer hungry Maryland kids can we afford to feed? Progress is a choice: we can decide whether to make the tough choices necessary to invest in our shared future and move forward together. Or we can be the first generation of Marylanders to give our children a lesser quality of life with fewer opportunities.”

Gov. Sam Brownback of Kansas…said…“My viewpoint, and the viewpoint of the majority of the Legislature, was we’ve got to change our tax policy to attract more people and attract more businesses”…

Mr. Brownback said that he initially had hoped to pay for some of the lost revenues…by ending a number of popular tax deductions, and by phasing in the cuts slowly. But he could not find support for that, so, even as other states are beginning to add spending again, he has been looking for savings and more cuts to offset the projected loss in tax revenues. “We are going to be going through everything with a fine-tooth comb,” he said…

You won’t hear any speeches from Brownback about raising education standards. He already opposes teaching science, evolution.

The Institute on Taxation and Economic Policy, a nonprofit research organization in Washington…issued a report this year that found that the states with high income tax rates had outperformed those with no income tax over the past decade when it came to economic growth per capita and median family income.

The choices made by Kansas and Maryland could provide something of a real-time test of the prevailing political theories of taxing and spending — though it could be years before the results are in.

The results will verify what these competing systems have always proven…supply-side economics, dribble-down theorizing by Republican hack economists consistently proves to be a drag on the economy – only making life a bit easier for the country club set.

States that improve their economy do so by improving education, public health, a focus on building a work force capable of learning on their own and keeping up with a changing world. That costs money. It’s better spent on children who will become the next generation of wage earners than on providing aid and comfort to corporate pirates who would sail away on a whim if they thought they could make an extra dime profit in some other state, some other country or continent.

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