The governor of Washington has approved a forty percent tax cut for the newspaper industry in that state. This measure is similar to prior tax cuts for the Boeing Company as well as members of the timber industry, the logic being that reducing taxes would tend to enhance the profitability of business firms.
So, what about the rest of us? If the Washington state economy is to be enhanced by reducing taxes – as it clearly would be – why not cut them for everyone? And if a forty percent reduction is beneficial, why not double that amount?
I am reminded of a debate held at the University of Chicago Law School when I was a student. Frank Knight and Thurman Arnold went at it over the question of a proposed increase in the federal minimum wage (it was to be raised to $1.00 per hour). Arnold was speaking of the virtues of the measure, and how no one would be hurt by it. Knight responded by asking Arnold why he was being such a piker on this point. If $1.00 per hour was beneficial and not harmful, he asked, why not raise it to $10.00 per hour or, for that matter, $10.00 per minute? Arnold had no response, as I recall.
