ECONOMIST Arthur Laffer, who argues that lower tax rates foster greater economic growth and revenue than significantly higher rates, has come under fire from Good Jobs First, a Washington-based group that calls Laffer's theories “snake oil.”
This attack is notable not for its substance, but for the identity of Laffer's critics. Simply put, Good Jobs First routinely opposes standard economic-development and free-market policies. The group's website makes clear its agenda, stating, “Because union members earn better wages and benefits than their unorganized counterparts, it is no exaggeration to say that unionization is economic development.”
The folks who used to work at Hostess might disagree now that union intransigence has forced the company into bankruptcy. But the theory at Good Jobs First seems to be that having no job is better than having a nonunion job.
That view is reflected in Good Jobs First's attacks on Walmart, which the group suggests is taxpayer-subsidized if anyone working there qualifies for government aid. Apparently, the dignity of work has no benefit for low-skill workers and they should disdain the chance to start climbing their way up the economic ladder.
On another front, Good Jobs First often criticizes state business incentives. In November, as officials sought to keep International Paper's headquarters and roughly 2,300 employees in Memphis, Good Jobs First executive director Greg LeRoy spoke to the Memphis City Council in opposition to business incentives, such as the property tax breaks International Paper was seeking. We're sure the affected workers appreciated LeRoy's “help.”
Good Jobs First opposes “suburban sprawl,” saying it “stresses the tax base necessary for public education” and “traps unemployed and underemployed workers by creating jobs beyond public transportation routes.” Never mind that people often move to the suburbs because the schools are better, or that maintaining all jobs within walking distance of a bus stop is an almost-certain physical impossibility.
To prevent suburban sprawl, Good Jobs First suggests 10 “Smart Growth Principles” that include “compact building design,” directing development “toward existing communities,” and preserving “open space.” That means confining citizens to smaller dwellings in compact urban areas where they don't want to live while blocking new construction in the areas they do.
In their critique of Laffer, Good Jobs First declares that efforts to significantly lower tax rates provide “a recipe for economic inequality, wage suppression, and stagnant incomes, and for depriving state and local governments of the revenue needed to maintain the public infrastructure and education systems that are the true foundations of long term economic growth and shared prosperity.”
In Oklahoma, our top income tax rate of 5.25 percent kicks in at $8,700 (or $15,000 for married couples). How does slashing taxes and increasing take-home pay for people qualifying for welfare amount to “wage suppression”? Good Jobs First's true concern is likely the second half of that sentence — that government would have less money.
Good Jobs First's policy prescriptions would boost union and government power at the cost of individual freedom and citizens' economic mobility. Proposals based on Laffer's theories may not be perfect — we support a lower tax rate but question the wisdom of full state income tax repeal — but his ideas would empower citizens far more than those promoted by Good Jobs First.