Saturday, February 11, 2017

Are Tax Cuts And Union Busting Responsible For Economic Growth?

Its hard to determine the effects of economic policies on growth rates.  That is because countries differ from each other in many ways in addition to their economic policies.  Comparisons between US states, however, provide a cleaner comparison because they share a  similar national relationship
This study compared similar states that have been exposed to different state tax and union policies.  There was no effect of state tax cuts and union policies on economic growth metrics.  Kansas and Wisconsin have cut taxes and they have made it more difficult for unions to form or survive.  Kansas was compared with Nebraska and Wisconsin was compared with Minnesota.  There were no observable change on several economic metrics between each of these states after tax cuts and anti-union policies were implemented in Kansas and Wisconsin but not in their comparison states.  Moreover, Kansas was left with large budget deficits after it implemented tax cuts which were supposed to stimulate enough economic growth to pay for the tax cuts.

These studies help us to answer the question about tax cuts and union busting but we live in a country where data has become less useful in answering questions.  Tax cutting and union busting are articles of faith in the Republican Party.  It is really a flat earth party.  Nothing will convince it that the earth is round or that global warming is a real threat to our planet.

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