Loading...
A no BYH to the neighbor constantly burning. You got me sick. So I’m sending you the dr bill....

Lower taxes recruit leaders

020517Hood

John Hood

Loading…

Tuesday, December 5, 2017

When Democrats attack pro-growth tax reform as “trickle-down economics,” I can understand their rhetorical intent. But the charge is silly on multiple levels — including the fact that every Democrat who ever serves in state or local office spends great time and effort to try to recruit business executives, entrepreneurs, investors and high-value professionals to their communities.

All producers and consumers make choices that define and drive an economy. But in every economic system that has ever existed there are always some human beings whose decisions have a larger effect than others.

These leaders exercise disproportionate sway for a variety of reasons. Some lead companies that employ hundreds, thousands, or tens of thousands of people while delivering goods and services to many more. Others are innovators who invent new products, create new firms and industries, or develop new ways to finance and market them. Still others invest large pools of money, and thus help determine which businesses gain the capital to invest and expand.

These are all leaders who (ideally) obtain and preserve their influence through voluntary exchange in the market. Other leaders gain their influence over the economy by getting elected or appointed to public office, developing and marketing ideas that attract a large public audience, or heading up major nonprofit institutions.

To observe that economies thrive or sputter partly in response to the decisions of a relatively small group of leaders is not to say that only elites matter or that the rest of us have no recourse if we dislike what they do. Private-sector leaders who make poor decisions run the risk of losing their incomes, jobs and influence. Government officials run the same risk — although incumbent politicians are typically harder to displace than incumbent CEOs, and private enterprises are disciplined by consumer choices more often and more effectively than government enterprises are disciplined by voter choices.

Still, there is no question that the fate of North Carolina’s economy, or that of particular regional and local economies within our state, depends to a large extent on whether key economic leaders want to live, work, invest or create businesses here or do so somewhere else.

Democrats and progressives fully accept this premise. Some even accept the premise that tax policy is a useful tool for attracting and keeping those economic leaders, which is why they endorse and award targeted tax incentives to politically favored firms or industries.

What they reject is the premise that reducing taxes for all executives, entrepreneurs, investors and high-value professionals will have broad economic benefits. They argue that lower taxes won’t attract more of these individuals to North Carolina, and that virtually none of the tax savings will “trickle down” as more jobs or higher incomes.

As an empirical matter, they are simply mistaken. Most peer-reviewed studies of state and local economies show that lower taxes, particularly on corporate and personal income, are associated with stronger economic growth.

Some of the best studies zero in on particular classes of economic leaders. A new study looked at location decisions by “star scientists” — those who rank in the top 5 percent nationally in the number of patented inventions. They found that such scientists were disproportionately to be found in states with lower taxes on personal and corporate income.

I’d venture to say that few Democrats or progressives would question the social value of attracting top-performing scientists. These individuals help create innovation economies with lots of localized spillover effects — new companies, more jobs, higher incomes that are spent on other goods and services. The effect is hardly a trickle. It’s a river.

John Hood is chairman of the John Locke Foundation.

Loading…

Humans of Greenville

@HumansofGville

Local photographer Joe Pellegrino explores Greenville to create a photographic census of its people.

Op Ed

December 14, 2018

Every time conventional Beltway wisdom congeals as quickly as it did on Tuesday — this time around, the certainty that President Donald Trump had blundered terribly in saying he would in effect "own" any government shutdown over border security funding — analysts ought to think back to…

HughHewitt

December 14, 2018

This just in: Black men are still being killed by police officers for no good reason.

But you knew that. Anyone who has remotely been paying attention should be aware that unjustified police killings of African-American men continue unabated. In far too many police departments, the unwritten rule…

Eugene Robinson

December 13, 2018

In the January 1953 edition of the magazine If: Worlds of Science Fiction, a fan of the genre from Texas, Marilyn Venable, made her debut as an author. “Time Enough at Last,” Venable’s story of a bookish man who survives a nuclear holocaust, made such an impression that Twilight…

john hood.jpg

December 13, 2018

Prosecutors investigating President Trump made big news recently, but it wasn't about Russia. Rather, in their sentencing recommendation for fixer Michael Cohen, lawyers with the U.S. Attorney's Office for the Southern District of New York wrote that in the final weeks of the 2016 campaign,…

Byron York

December 12, 2018

 

How appropriate would it be for a major publicly held American company to hire a person with a history of having publicly made the following statements and many others like them? (In the interest of brevity, I shall list only four.)

"The world could get by just fine with zero black people."…

Walter Williams

December 12, 2018

When I heard the news of the arrest in Canada of Wanzhou Meng, Huawei's chief financial officer, my thoughts turned to Al Capone.

Capone was targeted for running Chicago's underworld but was ultimately brought down for tax evasion. Canadian authorities detained Meng on what appears to be Huawei's…

LAKE

December 11, 2018

Here we are, two years later.

We've taken many, arduous, often tedious steps, only to return to where we began, having gone nowhere.

In late 2016, as Gov. Roy Cooper was preparing to take office, the General Assembly decided it would change the makeup of the Bipartisan Board of Elections and Ethics…

John Trump

December 11, 2018

Have the Republicans running the legislature gone soft?

Their lame-duck session has been lacking the fireworks I'd expected in the last hurrah of veto-proof GOP rule. The main agenda item was voter ID. And with a newly inked constitutional amendment to back it up, I fully expected Republicans to…

Colin Campbell

December 10, 2018

How should we respond to the urban-rural divide? The question has legions of politicians, scholars, journalists, and businesses scrambling for answers.

I respect their efforts. But I feel compelled to point out, respectfully, that the question is poorly conceived. Most people live in neither truly…

john hood.jpg

December 10, 2018

Orange County, California, Register

For too long, Congress has abdicated its constitutional obligations with respect to war powers.

On Nov. 28, the Senate took an important step toward reasserting this authority by voting 63 to 37 in favor of moving ahead on a resolution directing the removal of US…

324 stories in Op Ed. Viewing 1 through 10.
«First Page   «Previous Page        
Page 1 of 33
        Next Page»   Last Page»