Jeb's "voodoo economics"

http://www.sptimes.com/News/082501/Opinion/Jeb_s_voodoo_economic.shtml

Jeb's voodoo economics

St. Petersburg Times, published August 25, 2001

With Florida facing a budgetary bind after three years of celebrated tax breaks, Gov. Jeb Bush has offered what amounts to so much economic malarkey Not only do the $1.6-billion in recurring annual tax breaks bear no blame for the impending shortfall, says the governor, but they are in fact solely responsible for generating $3.4-billion in new state tax receipts over the period. With Florida facing a budgetary bind after three years of celebrated tax breaks, Gov. Jeb Bush has offered what amounts to so much economic malarkey Not only do the $1.6-billion in recurring annual tax breaks bear no blame for the impending shortfall, says the governor, but they are in fact solely responsible for generating $3.4-billion in new state tax receipts over the period.

"Our $1.6-billion in tax cuts over three years has yielded a 4.1 percent average annual increase in tax revenue," writes Bush, "because it is better to collect a smaller percentage of a larger pie than a larger percentage of a smaller pie."

Let's be charitable and call this pie half-baked. Bush's assertion is so preposterous that even a supply-side economist from Florida Atlantic University was forced to shake her head in puzzlement. Handed a copy of the governor's budget office spreadsheet that details his case, economics professor Sharon Lassar told the Palm Beach Post that, "There's no way you can make any sort of analysis using just one data point."

Indeed. Bush would have us believe that no other factor, such as the state's continuing population increase, contributed to an overall increase in tax collections. He would have us believe that a sales tax holiday for back-to-school clothing purchases would actually result in an increase in sales tax collections.