Leif M. Wright
Author, Journalist, Musician, Programmer, Daddy
"You feel uncomfortable, wincing and crying as you read. The daring style is comparable to Chuck Palahniuk’s novels" — Amy O'Hara

Leif M. Wright's Blog

The utter failure of supply-side economics

Filed under Bullshit, Politics
I live in Oklahoma. Yesterday, our governor, Mary Fallin, announced a plan to make up some of the nearly 900-billion-dollar deficit the state faces after incredibly low income tax revenues caused a budget crisis.
So what was her solution? Start imposing sales tax on services statewide. 
Services are simple things, like someone tattooing you. Or giving legal advice. Or preparing your taxes. Or painting your house. Or cleaning said house. 
Generally, service workers are among the lowest-paid people in our economy. But Fallin wants to force them to increase their prices, not for their benefit, but to make up the gigantic deficit her policies have created—policies such as enormous income tax cuts for wealthy taxpayers and large corporations. 
Because, see, the whole idea was if you cut taxes on the rich, they were supposed to in turn make lots of jobs and the entire economy would go through the roof because the rich were no longer paying taxes and had all this money to throw around like a rapper at a strip club. 
The only problem is, it never happened. Turns out, rich people like to hang onto their money, which is how they got rich in the first place. Instead of spreading the wealth around, they just kept getting richer—and I don't blame them for that. It's smart on their part.
But now, instead of realizing that she and her cronies in the state house were wrong and reversing the very tax cuts that have caused this gargantuan deficit, Fallin's proposal is to get the money from the poorest people in the state. That's right. Can't go back and tax the rich and huge corporations. Instead, let's increase everyone's cost of living by five percent. Utility rates? Going up by five percent. Funerals? Add five percent. Every service you can think of, under her plan, will increase by five percent, just so Fallin doesn't have to raise taxes on the rich people who got her elected. 
This is, starkly, the profound and utter failure of supply-side economics. It does not work. If you stop taxing the rich, the only thing that happens is the government has less money to operate, and it ends up hurting the middle class and the poor. Right now, Oklahoma's schools are all slashing budgets left and right because there's not enough money to run them. Our oldest son's school is only in session four days a week. Other schools have closed altogether. 
Because supply-side economics doesn't work. This was what I said when they started implementing it here a decade ago, and now I have been proven right. 
Fallin and her Republican cronies control the entire state government. They have no one to blame for this but themselves and their clearly failed policies.
It's time for someone to stand up and say: We let you try this out. It did not work. Time to admit that and reverse the tax breaks for the wealthiest Oklahomans and the huge corporations so the burden of your failure doesn't AGAIN fall upon the already overburdened middle class and poor.
Will that happen? No.