Kentucky senator and libertarian boy-wonder Rand Paul has discovered the cure-all for the city of Detroit which has been given the greenlight to declare bankruptcy.
The tax cuts would go to areas with an unemployment rate 50 percent greater than the national average, as well as cities like Detroit that have filed for bankruptcy or are at risk of doing so. The regions would be known as “Economic Freedom Zones.”
“Where we truly think this is different than government stimulus, is that a government stimulus takes money from one area of the country, brings it to Washington, then somebody — a central planner — has to decide who to give it to,” Paul said on a conference call with reporters.
“In ours, basically the money will go back to people who the customers have already voted for, businesses that are making a profit, a welding business in Detroit that has 10 employees. They’re the one that’s going to get the taxes back.”
How this is truly different than government stimulus is government stimulus is, well, stimulative while tax cuts aren’t. A central planner still has to decide who gets a tax cut. And if past is prologue, the kind of tax cut Rand Paul has in mind is the kind where poor people receive two dollars while the rich receive $2,000.
Rand Paul says that we should cut income taxes, corporate taxes, payroll taxes, and capital gains taxes for cities such as Detroit and that this would somehow enable The Poors to bail themselves out in their newly-founded “Economic Freedom Zone.”
If that sounds familiar, it’s more or less the inner-city prosperity gospel of Paul Ryan.