The RPs Debate Gambling: David Host Rebuts

David Host: Rebuttal #4

[The RP’s Provocation, Artur Davis’s Rebuttal #1; Ron Granieri’s Rebuttal #2; Natasha Dow Schüll’s Analysis; Spectrum Gaming Group’s Analysis; Jason Grill’s Rebuttal #3; The RP’s First Defense; Jason Grill’s First Response; Artur Davis’ First Response]

Given that Kentucky’s self-image is significantly rooted in an industry built upon parimutuel betting, opposing legalized gambling on moral grounds alone seems to require some degree of cognitive dissonance.  Moreover, the Kentucky Lottery is now more than two decades old – meaning that the camel (horse?) poked its nose under the tent some time ago.
Nevertheless, I do sympathize with those who wish to draw some practical line; who sense something amiss when state governments rush to endorse an industry which destroys lives.  Perhaps a reasonable case exists for allowing thoroughbred tracks to expand into slots and other gaming at existing locations; such a measure is a far cry from actively promoting the expansion of gaming as a remedy for budget shortfalls.
Certainly, expanded gaming offers an appealing short-term means for shoring up cash-strapped government budgets; perhaps a necessary evil in service of the long-term public good.  Yet, the risk in embracing gambling as an interim solution remains its potential to become a permanent substitute for fundamental reform.
I respectfully disagree with Jonathan’s premise that we cannot “balance our government’s books and invest in our country’s future without either raising taxes or reforming entitlement spending.”
On December 14, 1962, President John F. Kennedy made the following assertions in a speech before the Economic Club of New York:
 “We shall … neither postpone our tax cut plans nor cut into essential national security  programs.  This administration is determined to protect America’s security and survival  and we are also determined to step up its economic growth.  I think we must do both.. . .
[O]ur true choice is not between tax reduction, on the one hand, and the avoidance  of large Federal deficits on the other.  It is increasingly clear that  . . . so long as our  national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenue to balance our budget just as it will never produce  enough jobs or enough profits . . .
It is a paradoxical truth that tax rates are too high today and tax revenues are too low  – and the soundest way to raise the revenues in the long run it to cut the rates now.”
The last half-century has proven Kennedy right.  In the decade that followed his across-the-board tax cuts (which passed in 1964), federal revenue doubled – in large part due to the economic boom those tax cuts helped spark (unfortunately, federal spending also doubled).
Similarly, federal tax revenue increased by 75% during the ten years after the 1981 Reagan across-the-board tax cuts.  The deficits of that era occurred because federal spending exploded by 95%.
Finally, the Bush tax cuts of 2001 and 2003, federal tax revenue reached all-time high by 2007.  Once again, significant amounts of additional revenue could not keep pace with spending.
Accordingly, while the nationwide impact of tax relief does not transfer neatly to the state level, I believe that we should not dismiss out-of-hand the notion that tax cuts might offer a solution to the current budget crisis, due to the increased economic activity (and hence, additional revenues) that would ensue.

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