John Hartwell / Busting common myths about the economy
Published 7:43 pm, Thursday, September 23, 2010
Listening to my opponent talk about the Connecticut economy makes me want to call in the Mythbusters. Because some of her most commonly spouted assertions have no basis in fact.
MYTH: Tax cuts pay for themselves with increased tax revenues.
BUSTED: Just plain not true. After the Reagan tax cuts in 1981 and Bush cuts in 2001, revenue plummeted and the deficit soared. Every Ph.D. economist knows this -- including those who have served in Republican administrations.
I'm not opposed to strategic tax cuts that incentivize businesses to create jobs. But to promise broad tax cuts to voters as a way to fix our state economy is cynical and disingenuous.
MYTH: Our tax policies have made Connecticut unfriendly to business.
BUSTED: As the latest issue of The Connecticut Economy demonstrates, Connecticut is one of the lowest-cost states for manufacturing. Each dollar of manufacturing output costs just 79.3 cents to produce here, well below the national average of 83.3 cents. That's hardly business-unfriendly.
And what about business taxes? Our businesses pay state and local taxes that are the nation's fifth-lowest as a percentage of the gross state product. Businesses' share of total tax growth has been the lowest in the country.
Appealing as it sounds, we can't fix our economy simply by taking an axe to taxes. We need to create jobs, and doing that requires innovative ideas. For example, I would create a Fairfield County Venture Capital Fund, which would provide funding for new businesses in the fields of new media and information technology.
Creating jobs will also require investment in our transportation infrastructure and our entire education system, including building a well-trained workforce through programs at our local colleges.
Myths are simple engaging stories that spread easily through constant repetition. But let's remember that they are also pure fabrication.