Letter: A friendly rebuttal about the power of tax cuts
Published 11:44 am Monday, June 12, 2023
A May 31 letter from Richard Bonesteel makes some important economic points, but I must disagree with Mr. Bonesteel’s statement that “until recently, those who shared [Cundiff’s] passion for omnipotent government enjoyed complete control of the federal government….”
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That “omnipotent government” line is a strong rhetorical flourish, but it doesn’t reflect my actual position about anything. Here’s what I believe: Government needs to have enough authority and resources to carry out its responsibilities. No more authority than that, and also no less.
Opinions will always differ about what we should expect from our government, and what we shouldn’t, but I always hope everyone’s government will be intelligent, wise, and fair. As Americans decide what the responsibilities of government should be, the opinions of all Americans should be considered fairly. The needs and ideas of low-income people should always be heard, along with the ideas of those who are already powerful.
I won’t try to explain what either party believes about economic policy. Descriptions of either party’s policies by members of the opposite party are not usually objective or fair. I’m not currently a member of either major political party. I try to serve as an independent patriot, always trying to figure out what works for working families and all Americans.
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Mr. Bonesteel states, “Historically, there is no better stimulus to economic growth than tax cuts….” This seems to be only partly supported by relevant data. The causes of economic growth appear to be much more complicated than that.
Tax cuts can stimulate economic growth, especially when those who get the tax cuts spend the money on what they and others need. Spending on education, libraries, and factories can stimulate economic growth too.
The U.S. didn’t get out of the Great Depression because of tax cuts. To the contrary, my understanding is that the Franklin Roosevelt administration raised taxes substantially. The federal government used those taxes to employ Americans directly, building many things that still last today, as well as to jump-start the Social Security system that helps us all. Then came war preparations, and then World War II, in which government spending and a military draft quickly led to full employment — without overall tax cuts.
After World War II, America’s postwar prosperity wasn’t about tax cuts either. It seems to have been primarily about government investments in education, housing, and transportation, with major positive impact on favored groups. Substantial tax cuts came later, with mixed impact.
Mr. Bonesteel cites “healthy economic growth” in some “Republican states” and not in some “Democrat” states. Some people move every year to higher-income, higher-tax states. Some move the other way. Economies grow and shrink. Taxes are only one factor.
Not knowing for sure what I would find, I decided to check median household income in the six states Mr. Bonesteel cited, plus Washington state and the U.S. average.
The “median” of anything is the middle value — the value that divides the top half from the bottom half. In any population, the “median household income” is the value where half the households have more income and half have less.
Snapshot data on median household income by state, mostly from the Web site incomebyzipcode.com, shows these rankings: New Jersey $89,703. California $84,097. Washington state $82,400. New York state $75,157. Illinois $72,563. USA average $70,784. Texas $67,321. Florida $61,777.
A lot of things go into making household incomes, and a lot more things determine people’s quality of life — but overall, these economic data don’t support the notion that red states are succeeding and blue states are failing.
Thanks for a spirited and civil discussion!
DAVE CUNDIFF
Ilwaco