Ever since the national ALEC Exposed effort started in 2011, the American Legislative Exchange Council or ALEC has been on it’s heels. And so have many of the right wing politicians most closely associated with ALEC. The reason is that operations like ALEC operate best in the shadows. If you’re not familiar with ALEC here’s who they are (via ALEC Exposed).
ALEC is not a lobby; it is not a front group. It is much more powerful than that. Through ALEC, behind closed doors, corporations hand state legislators the changes to the law they desire that directly benefit their bottom line. Along with legislators, corporations have membership in ALEC. Corporations sit on all nine ALEC task forces and vote with legislators to approve “model” bills. They have their own corporate governing board which meets jointly with the legislative board. (ALEC says that corporations do not vote on the board.) Corporations fund almost all of ALEC’s operations. Participating legislators, overwhelmingly conservative Republicans, then bring those proposals home and introduce them in statehouses across the land as their own brilliant ideas and important public policy innovations—without disclosing that corporations crafted and voted on the bills. ALEC boasts that it has over 1,000 of these bills introduced by legislative members every year, with one in every five of them enacted into law. ALEC describes itself as a “unique,” “unparalleled” and “unmatched” organization. We agree. It is as if a state legislature had been reconstituted, yet corporations had pushed the people out the door.
It’s no wonder that once ALEC’s workings are exposed that politicians would runaway form it. No politician actually wants it known that they’re a puppet. And that’s exactly why the ALEC associated members of The Lege are attempting to run away from ALEC, Texas Republicans say ALEC hasn’t shaped their fiscal approach.
Seven GOP lawmakers have filed proposals to tighten the state’s spending cap and make it harder to raise taxes, two goals of a free-market-oriented group that urges business leaders and state legislators to collaborate on model bills for use in statehouses around the country.
While some of the lawmakers attend meetings of the American Legislative Exchange Council and many of the measures track the council’s longstanding prescriptions, five of the seven lawmakers on Thursday said the council didn’t influence their thinking.
Rep. Phil King, R-Weatherford, was alone in saying the council did influence him. The seventh, Sen. Brian Birdwell, R-Granbury, couldn’t be reached.
Known to few people who don’t closely follow statehouses, ALEC made headlines last year when the shooting death of teenager Trayvon Martin in Florida brought scrutiny of its promotion of that state’s “stand your ground” gun law. The law, passed in 2005, allows use of deadly force if a person feels threatened.
Last spring, critics also lamented the group’s urging of strict voter identification laws, prompting protests by civil rights groups and a threatened boycott of consumer products. Within days, seven Fortune 500 companies said they would withdraw financial support.
Rep. Jodie Laubenberg, R-Parker, said that while she’s the new state chairman for ALEC, the group’s model “Super-Majority Act” on taxes didn’t shape her approach.
The ALEC bill, first recommended in 1995, calls for a two-thirds vote of state lawmakers before taxes can be raised
Laubenberg noted that in her measure, she would raise the bar to three-fourths. She said she fears a future Legislature will try to increase the business-franchise tax.
“Three-fourths is my idea,” she said. “I’m glad ALEC is in sync.”
King, an ALEC national director, credited the group with partially inspiring his spending limit idea, although he said Gov. Rick Perry and the Texas Conservative Coalition also helped shape his thinking.
King’s proposal would allow most spending of state revenues to grow no faster than inflation and the state population.
The problem with ALEC is not just that their overriding concern is corporate profits, but that their policies are extremely harmful to middle and working class Americans. From the Center for Budget and Policy Priorities report mention in the article above, ALEC Tax and Budget Proposals Would Slash Public Services and Jeopardize Economic Growth.
Governors and legislatures in numerous states are considering, or have recently enacted, sweeping tax and budget proposals that follow recommendations of the American Legislative Exchange Council (ALEC), with potentially adverse consequences for middle- and lower-income families, individuals, and communities across the country.
These policies would cut taxes deeply for wealthy individuals, investors, and corporations; shift tax burdens substantially from well-to-do to middle- and low-income households; and impose strict constitutional or legal limits on revenues or spending that would severely limit states’ ability to provide adequate funds for education, health care, and other priorities, and impair state economic growth.
The specific policies include deep cuts in income taxes, particularly for affluent households and corporations; a repeal of state income and estate taxes; a shift in state revenues from graduated-rate income taxes to sales taxes that are much higher than most states have today; the end of various state-based tax credits for low-income working families; a Taxpayer Bill of Rights (TABOR) that would impose rigid constitutional limits on state revenues and spending; requirements that state legislatures garner two-thirds or other “super-majority” votes to raise any taxes or fees; and other mechanisms that would reduce the funds available to finance key public services. (For more on this, see “ALEC Proposals and Their Potential Impacts,” p. 2.)
Of particular concern is that these proposals rest on a weak foundation of questionable economic and fiscal assumptions and faulty analysis promoted by ALEC and its allies and spokespeople, most prominent of whom are Arthur Laffer, who is best known for popularizing the “Laffer Curve” — the dubious Reagan-era notion that cutting income tax rates would produce more government revenues due to the economic activity that it would generate — and Stephen Moore, a Wall Street Journal editorial board member and former president of the anti-tax Club for Growth. (An overview of ALEC publications on fiscal policy is found in the Appendix.)
ALEC’s studies and reports claim that its agenda would boost economic growth and create jobs, but they are disconnected from a wide body of peer-reviewed academic research on public finance. The “ALEC-Laffer Economic Outlook Index,” for instance, is heavily biased toward states with low taxes and limited government, and the index has failed to predict how well state economies actually perform. In addition, the preponderance of mainstream research refutes core elements of ALEC’s argument, showing that state tax cuts or lower state taxes generally do not boost the economy, state tax cuts do not pay for themselves in the form of higher economic growth that generates more revenues, progressive taxes and corporate taxes do not inherently damage the economy, and taxes generally do not cause people to flee a state.
In their analyses, ALEC and Laffer make many exaggerated claims, present misleading data, commit basic statistical errors, and do not control for other factors known to affect economic growth. They use techniques that manipulate data in ways that violate accepted standards of research. ALEC-related writings that experts have strongly criticized include a report by Laffer and his consulting firm for the Florida legislature on property taxes; a study by Laffer’s firm on the state income tax in Oklahoma; a study by Laffer and a colleague on the estate tax in Tennessee; and an op-ed by Laffer for the Wall Street Journal on states with income taxes, among others. (For more on this, see “Reliance on Faulty Analysis,” p. 8.)
To be sure, state tax and budget systems need improvement, both to help states meet their balanced budget requirements and to help them create the conditions for economic growth and a higher quality of life. Rather than enact ALEC’s radical tax and budget agenda, however, states would benefit far more by adopting a commonsense approach through which they would collect adequate revenue in an equitable manner, invest in key priorities such as education that are important for long-term economic growth, and reform state budget processes so that they can better plan for an uncertain future. (For more on this, see “A Better Way Forward,” p. 16.)
With all of that now being exposed it’s pretty clear why there are not many politicians still willing to profess their allegiance to ALEC.
Here are several links of interest on alternative policies that can be enacted that would actually help middle class and working Americans, and end this depression.
Prosperity Economics: Building an Economy for All.
The Progressive Economic Narrative, which I found in this post from Mike Lux.