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Our tax-cut legacy
Minnesota Management and Budget Commissioner Tom Hanson got some laughs at the capitol press conference Wednesday with a Freudian slip, saying "the recovery is over,'' which he corrected to "the recession is over.''
Hanson and State Economist Tom Stinson went on in rather somber tones to explain that the recovery will be one of the "slowest on record'' and the November 2009 forecast is depressingly familiar: another significant shortfall, this one on the order of $1.2 billion for the remaining 18 months of the current budget period.
One can't help but remember the big, permanent income tax cuts and capital gains tax cuts pushed through by conservatives at the state and federal level in 1999 through 2001, and the promise that they would produce a bonanza of new jobs and lasting prosperity. Instead, we got a bad recession almost immediately, an anemic and relatively jobless recovery in mid-decade, then the worst recession since 1929, and now a forecast of a slow and painful recovery.
In stark contrast to the roaring 1990s, when taxes were raised at the state and federal level to balance budgets and invest in health-care and education, the '00s have been an enormous economic disappointment (use the handy calculator on this site to see GDP growth since 2000).
We don't get to shared prosperity by JUST raising taxes. Practical progressives see taxes as a means, not an end. The revenue has to be invested as smartly as possible in good public stuff, education and physical infrastructure and human services. It's the hard-line conservatives who tend to argue that tax policy alone makes a difference.
The argument that tax cuts alone will improve our lives has been badly discredited.