News From Terre Haute, Indiana

Business

August 14, 2011

Mike Pence tax program: Good theater, bad policy

Scene one: Mike Pence, Republican, and his advisors lounge in air conditioning on a hot summer day. They have glasses of imported, cold sparkling water before them. They are bantering cheerfully about the coming campaign for governor against John Gregg, Democrat.

“Let’s throw the bomb,” says one.

“Isn’t it early?” asks another. “Mike did say no policy statements until later.”

“Well, it is later, technically,” says the first, “and no matter. Our campaign song should be ‘Now, not some forgotten yesterday. Now tomorrow is too far away.’”    

“Never,” shouts the third advisor. “That song is from Broadway’s ‘La Cage aux Folles,’ a musical favorable to homosexuality.”

The first sips from his glass. “The bomb,” he says. “Let’s keep focused. Now, when no one is looking, we toss the bomb. Mike sweeps the headlines. He grabs the high ground and Gregg is left throwing nut shells at our fortress position.” 

“The bomb is beautiful,” he continues. “Lower income tax rates and make the individual and corporate rates the same. You can’t get any more bang than that.”

“It will be sensational,” admits the second. “It makes folks happy and it allows us to continue crippling government services while giving more tax breaks to our friends in big business.”

“Business friendly is what we are,” the third chimes in.

Scene two: John Gregg’s sun-baked front porch in Sanborn. Political advisors sit about using newspapers as fans. An empty lemonade pitcher sits on a nearby table. John is heard inside on the telephone.

“Well,” says the first advisor, “they really dropped the bomb on us.”

“Bomb?” says the second. “It was more like a trash bag filled with rotten veggies. We’re not destroyed or even hurt; we’re just left cleaning up the mess.”

“And what a mess it is,” says the third advisor. “Individuals and corporations in Indiana pay very little in income taxes already. Generous credits and deductions see to that.”

Advisor one looks furtively at the door then cocks an ear to make sure the candidate is still on the phone.  “Then why,” he asks in a whisper, “did John issue that weak-kneed response to Pence’s proposal? If your opponent says something outrageous, you need to respond with outrage.”

“John’s too much the quiet hometown guy to do that,” the second says.

“Hometown quiet,” the third says, “is not what we need. Listen to John’s response to Pence: ‘I support tax cuts as does every Hoosier living, dead and not yet born.’ OK, that’s almost funny. Good, light touch. But then he goes on and cites his anti-tax stand in legislatures past.”

“What’s wrong with that?” says the second.

“First,” the third answers, “the past was a different time when tax cuts may or may not have been good policy. Second, securing fiscal stability should be a priority. Tax cuts threaten revenues that may be needed in hard times.

“Third, there is no reason for the tax rates of corporations and households to be the same. It’s just a big gift to the corporate contributors who are behind our opponent. Fourth, according to the current administration, Indiana is already so friendly to business that firms are flocking to locate here. What is to be gained if we are so well-positioned already?

“Fifth and foremost, Indiana suffers from a deficit of neglect. We have both deficiencies in maintenance and denial of services to those in physical, emotional and material need. If there are ‘spare’ revenues, don’t benefit the affluent when our state has decades of governmental delinquency to overcome.”  

Scene three: A solitary Hoosier stands under a sycamore tree, immobilized by inaction yet pondering possibilities.

Fade to black.  

Morton Marcus is an independent economist, speaker, and writer formerly with IU’s Kelley School of Business.

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