"If low taxes were the deciding factor for economic development, Antarctica would be booming right now. Clearly, quality of life, infrastructure and a skilled workforce are key ingredients," said Dana Wolfe Naimark, President and CEO [of the Children's Action Alliance]. [From an October 22nd CAA e-news letter.]

That's almost as silly as the "Make health, not wealth" signs carried by some of the medical socialists at the Obama protests over the summer.

For those who somehow didn't get the joke: Antarctica is a seriously harsh place to try to live (duh). The only people who do live there (temporarily) are heavily subsidized by research funding, or else they wouldn't be there. Now, imagine that some government decided to increase the taxes levied on the funds going to the researchers in Antarctica. If the tax increase was significant, the research organizations would have to reduce the number of scientists and scientific facilities they deploy to Antarctica every year. The economy of Antarctica (such as it is) would be made worse off.

Yes, Dana, quality of life, infrastructure, and a skilled workforce are key ingredients to a thriving economy. But those things are ultimately made possible by private-sector productivity. In most cases, those things are--or can be--provided most efficiently by the private sector. If we raise taxes on productive private-sector activities, we will hurt quality of life, infrastructure, and the development of a skilled workforce. That's true whether we're talking about Arizona or Antarctica.

And there's another gem, right there at the top of the CAA news release:

CAA this week released a new publication, Digging the Hole Deeper: Too Many Tax Cuts are Hurting Arizona, that explores state tax cuts over the past two decades and examines their consequences. The report concludes that tax cuts totaling more than $1.5 billion a year leave Arizona unable to provide the assets [sic] that families and businesses value - education, health care, public safety and infrastructure... A smart and balanced tax structure is what Arizona needs to climb out of our fiscal hole and move forward.

Again, for those who are not in on the joke, we'll look at two scenarios with regard to Arizona's "fiscal hole," or what the CAA report calls our "staggering budget deficit."

A) Actual Scenario (with the $1.5 billion in cumulative tax cuts):

Arizona comes into 2009 trying to spend $10 billion, but having general fund revenues of only $7 billion. Hence, a three-billion dollar deficit.

B) Ideal Scenario for CAA (without the $1.5B in cuts):

Arizona comes into 2009 trying to spend $11.5 billion, but having general fund revenues of only $8.5 billion. Hence, a three-billion dollar deficit.

Indeed, given the increased volatility of revenues at higher rates of taxation (due to an increasing marginal excess burden), it's probable that the percentage fall-off in revenues in FYs 2009 and 2010 would have been even greater than the actual fall-off, if we had tried to collect an extra $1.5 billion.

The only way to alter the fact of the three-billion-dollar deficit is to make the assumption that Arizona would somehow haved banked some of the extra $1.5 billion in revenue. But CAA has already explained that the money--if it had been available--should have been spent (not banked) on "assets [sic] that families and businesses value - education, health care, public safety and infrastructure."

--Tom