Talk about your deceptive marketing practices. South Dakota Sen. John Thune in last Friday's Rapid City Journal repeated the dubious claim that the tax cuts being considered in the U.S. Senate "will directly benefit middle income South Dakota families." In support of his argument, Thune uses a Tax Foundation analysis that says the tax plan will result in a "$2,528 boost in after-tax income for middle-income families" and "2,700 more new full-time jobs for South Dakota workers."
With all due respect to the senator, I'm skeptical about exclusively using data gathered by the Tax Foundation. The Tax Foundation's base of support comes from well-known conservative groups like The Charles Koch Institute, the foundation's second largest donor between 2012 and 2015 at nearly $500,000. Along with other conservative institutions, the Koch interests make up nine out of the 10 largest donors to the Tax Foundation. That by itself, of course, does not invalidate the Foundation's work and conclusions, but I believe that Thune could have gone to a source that is not so reliably conservative before trying to convince South Dakotans that the plan he's touting is unwaveringly good for us. At the very least, our senator could have called attention and responded to analyses that reach opposite conclusions.
For one thing, Thune could have consulted Congress's in-house studies. In a report on the Senate tax bill released last week by the non-partisan congressional Joint Committee on Taxation, the full story has a less rosy cast to it than Thune's characterization. According to the congressional analysts, by 2019 Americans at every level do indeed get a tax reduction. But by 2027, anyone making less than $75,000 a year would get a tax increase, while those earning more will continue get their taxes cut.
As to the senator's promise that the bill will create "2,700 new full-time jobs for South Dakota workers," I'd like to know what the heck he's talking about. We have more jobs than workers as it is. As an employer in this state who is in full contact with the situation every day, I know that we have a serious labor shortage in South Dakota.
Our dairy industry is seeking workers from Puerto Rico, and our persistent problem with a shortage of construction workers is an ongoing challenge. And don't even tell me about the situation on my home turf, the tourism industry. Tax cut or no tax cut, how does South Dakota create jobs when we can't fill the ones we have?
More to the specific point though, Thune's contention about job growth is pie-in-the-sky. Job growth was weak after George W. Bush's national tax cuts. Same goes for Kansas Gov. Sam Brownback's in his state during the past few years. I have yet to see a connection between business tax cuts and job creation, at least during economic expansions like the one we're in now. I challenge Thune and his supporters to find some evidence backing up that claim.
Short of that, I'm calling bait-and-switch on Thune and the tax cut he's touting.