The conclusion of the ISER analysis is crystal clear. Cutting the PFD -- the lever relied on thus far by both the Administration and legislature -- has the "largest adverse impact" on the overall economy (both jobs and income) of any of the so-called "new revenue" options and is "by far the costliest measure for Alaska families" of all of the options.
Let that sink in for a moment. In the midst of a recession both the Administration and legislature have pulled the so-called "new revenue" lever that has both the COSTLIEST and most ADVERSE effect of any option on the overall economy and families. Worse even than income, sales or even property taxes. Yup, that bad.
Why have they pulled that lever, then? Because it has the smallest impact on the Top 20%, what some call the donor class. See "Why are the House Democrats & Independents sticking it to middle and lower income Alaskans?," http://bit.ly/2yFjOyA.
The purpose of our post was to make the point that even taxes are better for the overall economy and Alaska families. In previous posts we have explained why, if we have to go there, we think a flat tax is the best of the alternatives. See "Finding the Alaska fiscal 'center'," http://bit.ly/2yaiN4t.
But in yesterday's post we just wanted to focus on the singular point that cutting the PFD is so bad for the overall economy and Alaska families that even progressive income, sales and property taxes are better alternatives.
Predictably and understandably, a segment of the response to the post was that "both are bad," and that instead of writing about either we should be focusing instead on cutting spending.
We certainly agree that cutting spending is better, and, indeed, have been writing about that for more than five years now, back when we suspect (indeed, know) some now taking that view were still going to the state for funding for this special project or that. See, e.g., "It’s time to cut state spending: The numbers show future has arrived," http://bit.ly/2gpPwJv (Oct. 7, 2012).
But increasingly we are coming to the view that continuing to take that position -- focusing exclusively on cuts instead of also comparing the various new revenue options -- is not only a waste of time, but indeed, is counterproductive and playing right into the hands of the Top 20%.
Why is that? Because, again frankly in our view, we think that the Administration and legislature -- indeed, any Administration and legislature -- have largely come to the end of the cutting.
But increasingly we are coming to the view that continuing to take that position -- focusing exclusively on cuts instead of also comparing the various new revenue options -- is not only a waste of time, but indeed, is counterproductive and playing right into the hands of the Top 20%.
Why is that? Because, again frankly in our view, we think that the Administration and legislature -- indeed, any Administration and legislature -- have largely come to the end of the cutting.
After promising repeatedly during the 2012, 2014 and 2016 election cycles that they would make the hard decisions necessary to continue bringing spending down, this past session the Senate Republicans -- to some degree the last line of defense in the effort -- essentially blinked and voted 12-2 to cut the PFD (i.e., raise new revenue) rather than cutting spending further.
Now, the consensus view in both the House and Senate, at least in the view of one reporter, is that "pending POMV legislation [which includes a permanent PFD cut along the lines of that incorporated in this year's budget] ... is largely expected to be fully passed next year." See "Permanent Fund trustees seek inflation-proofing bill," http://bit.ly/2yCgMPJ.
If the Senate R's have given up the effort to avoid new revenues, there really is little hope for it going forward.
But that doesn't mean that they -- and others driven by the Top 20% -- don't want average Alaskans to continue to talk about cuts first and only. Doing so diverts attention from what they and others are doing in the meantime -- cutting the PFD instead of evaluating it against other "new revenue" options which would be better for the overall Alaska economy and Alaska families, but would be worse for the Top 20%.
One might speculate that their hope is to continue generating the "cost cutting" discussion as a cover until the PFD cut is sufficiently ingrained in statute and elsewhere so as to be irreversible.
Now, the consensus view in both the House and Senate, at least in the view of one reporter, is that "pending POMV legislation [which includes a permanent PFD cut along the lines of that incorporated in this year's budget] ... is largely expected to be fully passed next year." See "Permanent Fund trustees seek inflation-proofing bill," http://bit.ly/2yCgMPJ.
If the Senate R's have given up the effort to avoid new revenues, there really is little hope for it going forward.
But that doesn't mean that they -- and others driven by the Top 20% -- don't want average Alaskans to continue to talk about cuts first and only. Doing so diverts attention from what they and others are doing in the meantime -- cutting the PFD instead of evaluating it against other "new revenue" options which would be better for the overall Alaska economy and Alaska families, but would be worse for the Top 20%.
One might speculate that their hope is to continue generating the "cost cutting" discussion as a cover until the PFD cut is sufficiently ingrained in statute and elsewhere so as to be irreversible.
Dividing your opponents by having them fight among themselves is a well-worn, and highly successful, tactic. We would not be surprised to learn even that some making the comments are, in fact, Facebook and other trolls created by or at least, knowingly or not, spurred on by the Top 20%. But that is a subject to pursue another day.
For now our point remains this. Cutting the PFD is the worst -- the most "adverse" to jobs, income and the overall Alaska economy, and "by far the costliest" to Alaska families -- of all the various "new revenue" options.
Want to spend time worrying about where this state is headed? Our advice is to worry about that.
For now our point remains this. Cutting the PFD is the worst -- the most "adverse" to jobs, income and the overall Alaska economy, and "by far the costliest" to Alaska families -- of all the various "new revenue" options.
Want to spend time worrying about where this state is headed? Our advice is to worry about that.
If you aren't, think about whether you -- including even some of you that are backbenchers in the legislature -- are being played. Increasingly we think you are.
No comments:
Post a Comment