I have to admit I frequently listen to a political or policy discussion, and have what might be called a “duh” moment–wondering why I see a rather obvious approach that everyone else is ignoring.
This week, Governor Pence announced that state revenues have fallen below budget estimates for the past few months, and the only remedy is to cut funds to education and state agencies and sell the state airplane. Leaving aside the airplane gesture (a one-time, largely symbolic “sacrifice”) why is the administration focusing on cutting services rather than delaying or foregoing its beloved tax cuts?
There are two ways to handle revenue shortfalls, after all–cut expenses or raise revenue.
Despite the fervent belief that lower taxes stimulate the economy and foster job growth, there isn’t an iota of evidence supporting that belief. Indiana is already one of the lowest-tax states in the Midwest, our economic indicators still lag those of our higher-tax neighbors, and the case for continued tax cuts is thin, to put it mildly. (Indeed, research indicates that quality of life drives economic development; continued service cuts that diminish quality of life indicators–far from stimulating the economy– are probably counterproductive.)
Then there was the research report presented at a recent meeting of the Advisory Board of the Institute for Working Families. The subject was paid sick leave, which relatively few Indiana employers offer. When researchers talked to those who opposed a law requiring a sick-leave benefit, they found that the major objection wasn’t to paid sick leave, it was to the idea of a government mandate. (Don’t tell me how to run my business!!)
If the objection is to the use of a stick, why not offer a carrot? Why not give a tax deduction or other incentive to employers who voluntarily decide to offer paid sick leave? Avoid the mandate, but reward the desired behavior. Evidently, such an approach hasn’t been considered.
My grandmother used to say there’s more than one way to skin a cat.
What am I missing?