The Democrats’ $1.9-trillion stimulus bill is a monster of public spending with the prime aim of rewarding political cronies. Free-spending blue cities and states get bailouts, along with unions with mismanaged gold-plated pensions for their members. The losers are the savers and taxpayers. That’s because it won’t be long before Argentina-style inflation and Europe-style taxes kick in to pay for these benefits to leftists.
The only hope is to grow the economy so that the debt can be paid, which is something Americans often know how to do.
But unlike other bills, this one contains a poison pill, to ensure that red states and cities inclined to cut taxes are stopped dead in their tracks.
Reason magazine’s Eric Boehm has located and identified this slimy, sneaky little rider:
Buried within the $1.9 trillion emergency spending bill that Congress sent to President Joe Biden’s desk on Wednesday is a provision that could effectively block states from cutting taxes if they accept federal bailout dollars.
That provision, added to the bill by the Senate last week, could put a halt to several states’ plans to cut taxes this year as a way to stimulate economic growth following the COVID-19 pandemic. Depending on how the text is interpreted, the measure could also make it illegal for states to create new tax credit programs like the ones that have become a popular mechanism for expanding school choice. Critics say this expansion of federal control over state policymaking is murky at best, and potentially unconstitutional.
Darn right, it’s unconstitutional. If a state can’t cut taxes, what exactly can it do?
It amounts to a Democrat bid to not just shovel other people’s money, but that little thing that comes with money, which is control. Conditionality. Power. In exchange for passing this monopartisan spending bill, their aim is not just to bail out blue cities and states at the expense of red ones, but to make red cities and states as overtaxed and badly run as blue ones.
And don’t think this isn’t an issue. Democrat-run blue states are hemorrhaging people. The COVID lockdowns have cut the benefits of living in big blue cities by shutting down all economic and social activity and forcing workers into their homes. A lot are realizing they don’t need to work in giant cities anymore, so the crime and high taxes they pay are starting to matter.
According to this January 2020 editorial in the Wall Street Journal:
Four states have lost population since 2010 including West Virginia (-3.3%), Illinois (-1.2%), Vermont (-0.3%) and Connecticut (-0.2%), but 10 experienced declines last year. New York was the biggest loser as a net 180,000 people left for better climes. Over the last decade New York has lost more of its population to other states (7.2%) than any other save Alaska (8%), followed by Illinois (6.8%), Connecticut (5.6%) and New Jersey (5.5%).
Hmmm, what do these states have in common? Large tax burdens and politically powerful public unions. Illinois’s property tax rates are the second highest in the country after New Jersey. The state lost $5.6 billion in adjusted gross income last year to other states, about twice as much as in 2012. Notably, income outflow hasn’t increased from Michigan or Wisconsin.
And when businesses and people flee these blue states, Democrats actually cheer….[ ]