Regulatory Reform

Center on Budget and Policy Priorities: Long on Opinion, Short on Research

The Left-wing Center for Budget and Policy Priorities (CBPP) is out with a new essay attacking the economic basis for low tax, free-market, limited government policy proposals like those laid out in Rich States, Poor States. In reality, CBPP’s paper is a case study in poor research methods, self-referentialism, and confirmation bias.

The main contention of CBPP’s paper is to argue that ALEC’s policies benefit entrepreneurs, businesses, and business investors at the expense of middle-and lower-income earners. However, CBPP ignores that these middle- and lower-income earners are best served by economic opportunity. It is this opportunity that allows them to find gainful employment, climb the earnings ladder over their career, and even open their own business, thereby further advancing opportunity in their community. In numerous studies, the consensus of academic experts shows that economic opportunity is best advanced by a competitive tax policy and an efficient government that provides core public services — not a high-tax, ever-growing government.

CBPP alleges that ALEC’s findings are disconnected from the peer-reviewed academic research, but instead of offering their own credible evidence, they go on to largely reference papers that have been published by CBPP and other far-left think tank “experts,” such as Peter Fisher, whose work has been previously debunked. The essay by CBPP uses almost no peer-reviewed references published in academic journals.

Compare this to ALEC’s recently published Tax Myths Debunked, which is authored by Dr. Eric Fruits and Dr. Randall Pozdena (former Vice President of Research at the Federal Reserve Bank of San Francisco), and contains page-upon-page of references from credible academic journals  published by well-respected economists. Tax Myths Debunked shows that the free-market tax principles which translate into higher rankings in Rich States, Poor States lead to economic growth and prosperity for all income levels. A recent literature review published by the Tax Foundation demonstrates this same academic consensus.

Not only do CBPP’s contentions run contrary expert consensus and commonsense, they also ignore the voice of the small business community. A 2008 survey from the National Federation of Independent Business (NFIB) highlights the policies that concern small businesses and ability to expand and create jobs. Indeed it is government policy issues such as taxes, regulations, and labor law that matter to job creators in America. The issues that CBPP says are important either cannot be changed by legislators (i.e. the weather or geographic advantages) or they rank on the bottom of the survey of small businesses.

CBPP’s essay is yet another hollow attempt to discredit sound public policy in favor of growing government and raising taxes. It asserts exactly the type of tax and fiscal policy misconceptions that Tax Myths Debunked was penned to correct. ALEC’s Center for State Fiscal Reform will continue to provide academic and data-driven research on policies that grow the economy and allow lawmakers to best serve their constituents.


In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and…

+ Regulatory Reform In Depth