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By Anonymous Mike, pseudonymously.

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Monday, June 23, 2008
Beer and Popcorn

When you hang around someone long enough, whether a spouse or a co-worker, you observe enough behavior and hear enough comments from them to develop a pretty good behavioral profile. They might never spout a word on politics or society, but I bet you can pretty much anticipate what they would say if they did.

So it is with what is still the Valley of the Sun's paper of record, the Arizona Republic. Newcomers to Arizona may think that the local paper should emulate the libertarian legacy of the state, but it doesn't take more than a few weeks of reading the broadsheet to get a totally different impression.

There there are days when it goes beyond impression to a total slap in the face... like yesterday's front page article "Tax policies draw attention during hard times." Keep in mind the "hard times" refers to hard budgetary times, not economic. The gist of the article? The low to moderate tax rates that Arizonans enjoy have led to the impoverishment of much needed programs. You selfish bastard.

That question.... lower taxes or more money for public spending is in the short term a political question and while you may think an article like this belongs in the opinion section and not the front page, it is a valid issue especially in an election year and with the state budget in deficit. However for the AZ Republic, there are two assumptions that pervade the article and bias the terms of debate.

First the focus on tax rates and tax revenue per capita, not on growth in spending or on the efficiency or validity of public programs. A budget deficit always has two sides, a revenue and a spending side. While there is a sharp drop in state tax revenue, that drop has been exacerbated by the large increase in spending during previous years. Proponents of TABOR, tying spending increases directly to inflation and population growth, point that if Arizona had such a policy and reined in spending we would still have a budget surplus.

The Republic's approach, looking at tax revenue instead of what the money is spent on, should look pretty familiar to anyone following school finance debates. Those school debates are driven by the measure of spending per student, low spending is equated with low student achievement. Never mind the evidence showing the lack of causality between increased spending and performance, the implicit assumption is that to be more effective an educational system needs to be higher cost; that leads to focusing the debate on raising costs rather than raising effectiveness. Same here with tax revenue with the Republic implicitly stating that Arizona needs to be a higher tax state in order to become a more effective and competitive one.

Second is what I call the "beer and popcorn" argument.

A few years ago, an aide to the previous Canadian prime minster argued against diverting money from child care programs to instead a subsidy given directly to the families that would use those services saying that those people would waste the money on "beer and popcorn." In other words the government knows how to spend your money better than you. We're not quite at that point here in Arizona, but there does seem to be a growing conceit as the article quotes an ASU economics professor:

"Our legislators have taken every opportunity to deliver tax breaks to individual households, but it doesn't mean it's providing for the infrastructure that the state needs," he said. "I'd argue that taking the same money and investing it in infrastructure like roads, schools and advanced water systems would be far more enhancing to economic growth."

I certainly don't have a Ph.D. in economics, but I get the impression from the learned professor that he thinks that those individual households take their rebated tax money and burn it in giant backyard bonfires as opposed to say, spending it which puts it back into the economy which raises more tax revenue.

I am sure the professor feels that it would be better for the money to be taken out of private hands, where it would be wasted on beer and popcorn, and instead spent on things like tax breaks for favored corporations and light rail. Of course that presupposes the fact that Arizona has already assumed the responsibility for school construction or for years had brought in large budget surpluses while still delivering those selfish tax breaks.

So as the state fiscal crisis reaches boiling point this week, you and every other Arizonan should feel just a twinge of guilt because you are too cheap. For myself, I'll be spending my state tax refund on... you guessed it... beer and popcorn.