We’re approaching our state primary for Governor here in Massachusetts. All the commercials I’ve seen simply tell how each candidate will cut taxes taxes taxes. “I’ll cut the gas tax.” “I’ll push to roll back the income tax.” “I’ll cut all taxes.”

I can’t help feeling rather discouraged by all the talk, mainly because it’s all such crap. Let’s think about the business equivalent. What would you think if someone came into your office wanting to be put in charge of an important project (say, running the entire state of Massachusetts) and this was their business plan:

1. I’m going to reject equity funding and fund with debt.

Would you put them in charge of anything? Of course not. Because frankly, deciding how to fund a project is something you decide after you decide what the projects will be, what the expected benefits will be, etc. In fact, it makes no sense to even think about financing before you know the ROI (in whatever currency is important to you) of the various projects. Some things have such a high return, you’re happy to finance them with high-interest-debt or with high taxes. Other things have a low return, and you only want to finance them if they’ll pay for themselves in 3 months.

Running a state is much more complex than running a business, and at some point we’ve been brainwashed to care about nothing but knee-jerk rejection of taxes.

Let’s see a return to sanity and recognize that taxes, like bonds and foreign borrowing, are nothing more than a funding choice. We will pay for the cost of government one way or another–borrowing eventually must be repaid (with interest!) from dollars raised through taxation. So the focus should be on what programs we want to use money for, and only then should we discuss where that money will come from.

It bodes ill that candidates from both parties today worry only about tax promises, and so much less about policy and governance.

There’s more to life than funding and taxes.…

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