No Free Lunch

by CalWatchdog Staff | July 13, 2010 12:06 pm

Laura Sucheski: The California Budget Project, our favorite left-leaning “non-partisan” budget analysis organization, released a budget brief today titled “No Free Lunch: Tax Cuts Widen Budget Gaps.”[1] The brief is yet another indication of the organization’s overarching belief in increased state spending at all costs.

A few good bits, in case you haven’t read it:

“When states cut taxes, typically they must make up for the lost revenues by reducing spending, and expenditure cuts tend to reduce any positive impact that tax cuts might have on state economies.”

Expenditure cuts are a bad thing for the state economy? How? Why? The statement wasn’t sourced, so we’ll never know.

“State and local taxes are not key factors in determining where companies do business.”

If wealthy sports stars including LeBron James are choosing low-tax states over higher ones,[2] investors and businesses are surely doing the same thing.

Alan Greenspan said, “Let us remember that the basic purpose of any tax cut program in today’s environment is to reduce the momentum of expenditure growth by restraining the amount of revenue available and trust that there is a political limit to deficit spending.”

In other words, we need to reduce the number of free lunches. From the point of efficiency and economic growth, that’s not a bad thing.

Source URL: https://calwatchdog.com/2010/07/13/no-free-lunch/

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