Stop Digging

            An old adage says that if you’re in a hole, stop digging. Democrat politicians don’t seem to get the essence of this simple truth.

            A November 14 editorial in the Wall Street Journal starkly demonstrated how Connecticut, New Jersey, and Illinois, all Deep Blue states with high taxes, have driven high income earners out of their states. These taxpayers, fed up with soak-the-rich policies, have escaped in droves to low-tax states. With revenues from millionaire taxpayers falling, Connecticut, New Jersey, and Illinois have all chosen to get themselves out the revenue hole by doing the one thing that got them in the hole in the first place: raising taxes even higher.

            Now, high-tax states want Congress to get them out of the hole. They favor a clause in the tax-reform bill that would allow their citizens to continue to deduct high state income taxes and mortgage interest from their federal income taxes. This, in effect, would have low-tax states subsidize high-tax states. Instead of encouraging high-tax state profligacy, Congress should say No: It’s time you learned that when you’re in a hole you should stop digging.

            Common sense can be applied to other parts of the tax reform bill. Lowering the corporate tax rate from 35% to 20% will stem the outflow of corporations to countries with lower taxes and put out a welcome mat for those companies that would like to come home. Similarly, lowering tax rates on small businesses, who create 80% of the new jobs in this country, will help them grow and prosper.

            One thing that Chuck Schumer and his cohorts on the Democrat side of the aisle still don’t seem to understand is that, in the end, raising taxes even higher on high-income earners does not result in greater revenues for our Treasury. When rich people keep less of their income, they have less to invest in new businesses that create more jobs and “raise all boats.” Wealth redistribution policies preferred by the Democrat party can never lead to greater prosperity: it can only stifle growth and make the hole deeper.

            Growth is the only way out of the hole. But first you have to stop digging.