I’m tired of the drum beat in stories like the one John referenced from?the Durham?Herald Sun :
If it expires, the highest [income tax] rate would fall to 7.75 percent and cost the state $46 million during the next fiscal year. …
Cutting the corporate rate from 6.9 percent to 5.9 percent would cost more than $200 million …
Losing the half-cent [sales tax] would cost the state more than $380 million.
Thump, thump, thump. I know in the back of my mind what they’re talking about opportunity cost. There is a big logical difference, though, between “The state didn’t take everything they could reach” and “The state cut a check for invoices received”.
The logical end of the opportunity cost model is: Not confiscating the entire gross state product will cost the state $302 billion this year. (Never mind there wouldn’t be any GSP at all in 2006.)
It would be less rhetorical to say particular changes would reduce collections for a particular tax;?the expection is that expanding the economy will increase revenues elsewhere. But then, maybe reducing the pro-tax rhetoric is not the intent.
