The fallacy that tax cuts stimulate economies
The tax cuts were supposed to stimulate Ohio's economy and create jobs. But that never happened once the economy tanked. Instead, the changes ended up costing Ohio more than $2 billion a year in lost tax revenue; money that would go a long way toward closing the state's $8 billion budget gap for fiscal year 2012 [...]
Across the country, taxpayers jarred by cuts to government jobs and services are reassessing the risks and costs of a variety of tax reductions, exemptions and credits, and the ideology that drives them. States cut taxes in hopes of spurring economic growth, but in state after state, it hasn't worked [...]
A 2008 study by Arizona State University found that that state's structural deficits could be traced to 15 years of tax cuts, mainly income-tax reductions that "were not matched by spending cuts of a commensurate size."
In Texas, which faces a $27 billion budget deficit over the next two years, about one-third of the shortage stems from a 2006 property tax reduction that was linked to an underperforming business tax.
In Louisiana, lawmakers essentially passed the largest tax cut in state history by rolling back an income-tax hike for high earners in 2007 and again in 2008.
Without those tax reductions, Louisiana wouldn't have had a budget deficit in fiscal year 2010, the 2011 deficit would've been 50 percent less and the 2012 deficit of $1.6 billion would be reduced by about one-third.
While states have destroyed themselves gifting money to their richest, don't forget George W. Bush's contributions at the national level:
There is no evidence that perpetual tax cuts stimulate any economies. Instead, GOP-fueled cuts end up decimating the kinds of assets that do attract businesses -- an educated workforce, infrastructure, and quality of life features (like parks and cultural facilities) that attract top talent. There's a reason that places like NYC and the SF Bay Area continue to attract new businesses despite their high taxes. A top-notch business environment costs money to maintain.
Republicans cut taxes in pursuit of their magical pony, decimating state budgets as they prattle on about "fiscal responsibility". The end result? Red ink as far as the eye can see, and economies further in the gutter.