An Iowa City-based think tank has released a study that uses the phrase “snake oil” to describe the policy prescriptions of the Republican-leaning American Legislative Exchange Council.
Iowa Policy Project research director Peter Fisher co-authored the report. Fisher says the tax cuts and cuts in state government spending that are advocated by the American Legislative Exchange Council haven’t lead to economic growth in the states that have adopted those policies.
“They’re not a prescription for prosperity,” Fisher says, “it appears, if anything, the opposite.”
Fisher reviewed the American Legislative Exchange Council’s economic outlook rankings for states over the past five years.
“The better you ranked on their measure of competitiveness, the worse you did on measures of income — the lower your lower median family income, the higher your poverty rate,” Fisher says.
Utah, for example, gets top ranking from the American Legislative Exchange Council for its tax and business climate in each of the past five years, but Fisher says Utah was 43rd among the states in income growth among its citizens.
The American Legislative Exchange Council advocates getting rid of state income taxes and estate taxes and dramatically lowering the taxes states charge to corporations as ways to boost state economies. Fisher argues those policies are “deeply flawed.”
“It is not a recipe of state policies to achieve growth and prosperity,” he says. “But a recipe for declining incomes and really for depriving state and local governments of the revenue needed to do the things that really matter for long-term state economic growth: maintaining public infrastructure and a quality education system.”
The American Legislative Exchange Council opened a policy summit in Washington, D.C. yesterday. The group’s website says its “pro-jobs and fiscally sound policies” will help state policymakers jump-start the economy, because federal policymakers are engaged in “partisan gridlock.”