GUEST COMMENTARY: Dems should reject GOP's bogus trickle-down theory

2012-05-30T17:45:00Z GUEST COMMENTARY: Dems should reject GOP's bogus trickle-down theoryBy Shaw Friedman
May 30, 2012 5:45 pm  • 

Any Democrat looking at either statewide office or the state Legislature needs to think twice before embracing Republican calls for yet more budget-busting cuts in corporate taxes as a way to spur job growth. The evidence is overwhelming that there are far better ways to make Indiana attractive for economic development and job creation.

First the politics: Hoosiers, when polled, know there is a better, smarter way to grow new jobs than simply cutting Indiana’s corporate tax rates. Indiana’s business tax climate is already among the 10 most favorable in the nation, according to the Tax Foundation. A recent survey taken by the Kauffman Foundation ranks Indiana the fifth-least-costly state in the country for hiring a new employee.

We’ve got the benefit of a statewide poll conducted by the Benenson Strategy Group in March of 600 likely November 2012 voters. Hoosiers simply aren’t falling for Republican trickle-down theory, and neither should authentic Democrats.

A full 57 percent of Hoosier voters polled said their view of the best way to create new jobs was “we should improve our schools and produce more skilled workers and engineers so companies will be able to hire the workers they need here.” Compare that with just 37 percent of Hoosiers polled who believe “we should lower taxes and loosen government regulations that cut into business profits” as the way to increase jobs.

That’s right -– by a margin of 20 percent, Hoosier voters know that investing in education rather than slashing revenues is the way to go. Democrats need to give Hoosier voters credit and tailor our arguments and our campaigns accordingly.

The public understands that trickle-down doesn’t work. Democrats need to be ready to make the case on why there is a better way to accomplish economic development and job creation than corporate tax cuts.

The literature is there for any Democrat ready to articulate an alternative vision. Amlan Mitra, economics professor at Purdue Calumet, says his research shows that “tax cuts and incentives are unlikely to attract businesses, stimulate economic activity and create jobs in a cost-effective way.”

Let’s continue looking at the data rather than right-wing GOP political dogma. Definitive studies cited by academics like Mitra, such as Bartik in 2003 and 1991 and Fisher in 1997, state conclusively that state and local investments in public services stimulate economic growth and create jobs. In sharp contrast, Republican orthodoxy on job creation relies almost exclusively on tax cuts.

The bottom line: No real Hoosier Democrat ought to buy into GOP claims that what is needed is simply more tax cuts for business. Repeating right-wing talking points accomplishes only three things: It helps turn right-wing GOP ideas into right-wing GOP realities, it legitimizes bad ideas and it elects Republicans.

The polling shows Hoosiers want a different vision for job creation than simply more corporate tax cuts. Let’s give voters a real alternative in November.

Shaw Friedman, a LaPorte attorney, served as legal counsel for the Indiana Democratic Party from 1999 to 2004. The opinion expressed in this column is the writer's and not necessarily that of The Times.

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