Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

Soaking the rich

State budget, Taxes, Business


In my “Rich states, poor states” blog last month, I wrote that Wisconsin has the tenth worst economic performance ranking among the states, according to a report by  The American Legislative Exchange Council (ALEC). 

Co-author of the report and highly acclaimed economist Dr. Arthur B. Laffer said, “States cannot tax their way into prosperity.”

Laffer, president of Laffer Associates, and Stephen Moore, senior economics writer for the Wall Street Journal have a column in the Wall Street Journal that emphasizes a point I have been making for some time: Taxes go up, people move out.

Laffer and Moore cite a number of states subscribing to the president’s budget philosophy of soaking the rich. They write:

“Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states. And the evidence that we discovered in our new study for the American Legislative Exchange Council, 'Rich States, Poor States,' published in March, shows that Americans are more sensitive to high taxes than ever before. Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.”

Laffer and Moore make this strong assertion:

“Dozens of academic studies -- old and new -- have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.”

You can read the entire column here. 

overnor Doyle’s proposed 2009-11 state budget includes $1,707,734,400 in tax and fee increases.  The nonpartisan Legislative Fiscal Bureau (LFB) reports the state would spend 7.7 percent more during 2009-11 compared to the base year doubled under the governor’s proposed budget.

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