Keller @ Large: Do Tax Hikes Damage The Economy?
BOSTON (CBS) – There’s been a lot of tax talk this week because the latest round of state tax hikes kicked in Wednesday. And every time that happens we get another round of debate about whether or not tax increases do serious damage to the economy.
It’s not a one-sided argument.
The first president I remember was JFK, and he and every president since have argued to some extent that tax cuts are economic stimulus.
Listen to Jon’s commentary:
And there’s no doubt tax increases can alter behavior. Just ask a friend in retail in a New Hampshire border town, and they’ll give you an earful.
Then again, I recall President Clinton raising taxes just prior to an economic boom. And somehow, those occasional hikes in the minimum wage don’t often seem to bring commerce to a halt.
But that’s argument in a vacuum.
We have a real-life context to think about, the state of the Massachusetts economy, described in the latest report from the Fed and UMass as “disconcerting,” “somber” and “deflating.” The unemployment rate is on the rise, they say, especially for the young and less-educated.
Gone are the salad days of 2010, when Gov. Patrick took a re-election victory lap for how well we had weathered the recession.
Now, the report says, unemployment is rising fast, and widening the gulf between the lucky locals with pricey property and booming stock portfolios, and the luckless. Picky employers, they say, are hiring college grads for jobs that used to go to the non-college kids.
Something tells me we’re about to get a yearlong case study of the impact taxes can have.
And if I were the local power structure, I’d pray extra hard for a happy ending.
You can listen to Keller At Large on WBZ News Radio every weekday at 7:55 a.m. You can also watch Jon on WBZ-TV News.