If you tell a lie big enough and keep repeating it, people will eventually come to believe it. That’s Propaganda 101.
Based on her testimony last week before the Senate Committee on Economic Development, Mary Bell, the president of the Wisconsin Education Association Council (WEAC), was a star pupil in that class.
WEAC’s membership is one of the largest groups of tax spenders (as opposed to tax payers) in the state. Their very existence depends on all of us paying our taxes. Understanding their perspective, as well as their voracious appetite for tax dollars, it is not hard to explain why Ms. Bell spent her time before the committee telling us why Wisconsin needs higher taxes.
Yes, I said higher taxes. Here is a sample of what Ms. Bell told us she believes:
“Pundits have incorrectly viewed tax cuts as the primary ingredient of economic development. The end game of this logic would have the state’s infrastructure erode to such an extent that any clear-thinking individual would be able to see the harm.”
She also told the committee, “One proven effect of tax cuts, however, has been a massive shift in the nation’s wealth from the middle class to the wealthy. This history suggests that more tax cuts will only further divide between the nation’s haves and have nots, placing more pressure on the dwindling middle class.”
So, WEAC believes that the only way to promote economic development in Wisconsin is to increase taxes and spend all that extra income on their members. I am not sure how many business owners and taxpayers agree with this opinion, but at least we know where they stand.
Letting people keep more of their money is a bad thing, according to WEAC. Lower taxes causing greater economic disparity is an interesting conclusion, especially when you compare that line of thought to the report released by the U.S. Treasury Department the same day that Ms. Bell was “educating” us on American economics.
The Wall Street Journal editorial about the Treasury report, published the same morning Ms. Bell told us how tax cuts increase the divide between the haves and have nots, states, “The Treasury Department report shows, beyond a doubt, that the U.S. remains a dynamic society marked by rapid and mostly upward income mobility. Much as they always have, Americans on the bottom rungs of the economic ladder continue to climb into the middle and sometimes upper classes in remarkably short periods of time.”
Over the 10 years between 1996 and 2005, the Treasury Department tracked 96,700 tax filers over the age of 25. During that period, 58 percent of those individuals in the poorest income group were able to move up to a higher income category. Twenty-five percent moved into middle or upper-middle income groups, and 5.3 percent moved all the way to the highest bracket.
The study period includes the tax cuts enacted during President George W. Bush’s first term, but does not include the negative outcomes that Ms. Bell says is obvious to any clear-thinking individual.
Another interesting fact from the Treasury report is that after-inflation, median incomes for all tax filers increased by 24 percent during the study period.
The Treasury report concludes that “relative income mobility is the same in the last 10 years as it was in the previous decade.” That previous decade included the after-effects of the Reagan tax cuts that created the longest economic expansion in American history.
The Treasury report clearly refutes one of Ms. Bell’s conclusions. The other conclusion she draws about tax cuts eroding our infrastructure is also contradicted by reality. Tax cuts routinely result in higher revenues for the government. People with more disposable income choose to spend it or invest it in companies that earn more and pay more in taxes.
If lower taxes mean more revenues, shouldn’t tax spenders like WEAC favor them? Maybe they just don’t trust us with our own money.
Whatever the answer to that question is, before she comes back to testify at the Capitol again, Ms. Bell might want to take Economics 101 instead of enrolling in Propaganda 102.
Wisconsin State Sen. Ted Kanavas (R-Brookfield) represents the 33rd District.