What policies are essential if we want to promote freedom and prosperity? While politicians and pundits claim to have all the answers, there are proven principles and policies that have been shown over time to bring increased economic prosperity for...
What policies are essential if we want to promote freedom and prosperity? While politicians and pundits claim to have all the answers, there are proven principles and policies that have been shown over time to bring increased economic prosperity for governments and individuals. We are blessed in America to have fifty states that can be viewed as laboratories for democracy, all working out the policies that will enhance or inhibit prosperity. In this episode, Linda and her guest, Jonathan Williams from the American Legislative Exchange Council (ALEC), discuss ALEC’s new resource, Essential Policy Solutions for 2023. Glean from examples of success to help your state and nation. Listen today!
© Copyright 2023, Prosperity 101, LLC
For information and resources visit: https://prosperity101.com
If you would like to be a sponsor, please contact us at https://prosperity101.com.
For additional information visit www.ALEC.org
Linda J. Hansen: Welcome. Thank you for tuning in to this episode of the Prosperity 101 Breakroom Economics Podcast. My name is Linda J. Hansen, your host and the author of Prosperity 101- Job Security Through Business Prosperity: The Essential Guide to Understanding How Policy Affects Your Paycheck, and the creator of the Breakroom Economics Online course, the book, the course and the entire podcast library can be found on Prosperity101.Com. I seek to connect boardroom to break room and policy to paycheck by empowering and encouraging employers to educate employees about the public policy issues that affect their jobs. My goal is to help people understand the foundations of prosperity, the policies of prosperity, and how to protect their prosperity by becoming informed, involved, and impactful. I believe this will lead to greater employee loyalty, engagement and retention, and an increased awareness of the blessings and responsibilities of living in a free society. Listen each week to hear from exciting guests and be sure to visit Prosperity 101.Com.
Thank you so much for joining me today. At this time of year, many Americans are thinking about taxes, but many people don't realize all that goes into the policies of taxation at the state level or at the federal level. The American Legislative Exchange Council recently released their essential policy solutions for 2023. ALEC is always known for sensible solutions that help American citizens across all 50 states. With me today to discuss this and other issues is Jonathan Williams. Jonathan is the Chief Economist and Executive Vice President of Policy at the American Legislative Exchange Council, where he works with state policymakers, congressional leaders and members of the private sector to develop fiscal policy solutions for the states. He founded the ALEC Center for State Fiscal Reform in 2011 and co-authors The Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index with Reagan economists Dr. Arthur Laffer and Stephen Moore.
Prior to joining ALEC, he served as Staff Economist at the Nonpartisan Tax Foundation, authoring numerous tax policy studies, Jonathan has spoken to audiences across all 50 states and provided testimony for the U.S Congress as well as numerous state legislative bodies. His work has been featured at the federal level by the White House, the Congressional Joint Economic Committee, and the U.S House Committee on Ways and Means. He is a frequent guest on radio talk shows and has appeared in numerous television outlets. He was also the recipient of the prestigious Ludwig von Mises Entrepreneurship Award. He is also a repeat guest to this podcast and a friend and a fellow laborer in the world of conservative politics and policy. Thank you, Jonathan, for joining with the podcast again. I'm so glad to have you on to share your wisdom.
Jonathan Williams: Well, thank you so much my friend. It's great to be back with you on the podcast, and thank you for all the great work that you're doing to expose Americans at large to some of the most important policy issues out there. And as I always say, bringing greetings from the land of make believe in Washington DC. As Reagan would always say, Washington’s islands is surrounded by reality and of course they say that about Madison, Wisconsin too, but I think they're both onto something in that regard. But it's just a pleasure to be back and talk about, as you outlined, some of the key essential policy solutions that we at ALEC have developed. We're celebrating 50 years this year as an organization, we were founded in 1973 and it's 50 years of trusted policy solutions that we put together and so really excited to be back on to talk about some of those ideas.
Linda J. Hansen: Well, that is great and I didn't realize, I guess I forgot it was 50 years and just such great work that the organization has done and that you have done. And when you've been on before, we've talked about The Rich States, Poor States Guide. We've talked about several different policy issues. But today I'd really like you to focus on this new publication that you have, the Essential Policy Solutions for 2023. Can you give the listeners an overview of what they'll find when they go and download this booklet?
Jonathan Williams: Yeah, absolutely. It's a great resource with, I think, something for everyone who cares about good economic and good ideas writ large across the United States, especially in these 50 laboratories of democracy that we often talk about at ALEC. And that's of course, where our focus is with our 2,000 state legislative members across every single state, is to come up with trusted ideas that really move the ball forward and enhance free markets and limited government and federalism and at the end of the day, empower individuals, right, disempower big government bureaucracies. And so what you'll see in this document that we've got is really across the board, we had ten different policy committees at ALEC. So something that you would see in any one of your state capitals if you were to go visit or you testify and work on issues back generally, any issue that your state takes up, we take up at ALEC. Outside of something, we don't deal with the social issues, we allow some of our other friends to deal with those things, but on the economic space, and this document includes something from every one of our different ten task forces. Everything from health care issues, to civil justice and justice issues and tax policy, to energy policy. So incredible amount of different policy solutions all generally linked to a piece of ALEC model legislation, something that ALEC over our 50 years has been known for.
We have nearly 1000 pieces of model policy on our website for those to take and run with that they'd like or change. But generally those are things that are bringing about better solutions in state governments across the country. Now, I will say of the many things we talk about in this report, when you focus it down into kind of the top tier priority issues for ALEC. What we have really focused on this year, and we're hearing from state legislators across the board on are we like to say them with three E's, and that is the economy, energy, and education. And those are things that are happening all across the country, I think right now we're seeing a generational shift and a generational opportunity to really reform the way that education is provided and to give parents more flexibility, to really empower parents, empower families and allow dollars to follow children instead of sometimes broken institutions and certainly buildings. I mean, there's no reason why the education system has worked the way that it has. When you hear these horror stories, Just the other day, my good friend Steve Warner and I were on a conversation, and he was talking about some school districts in places like Chicago and Baltimore, literally have entire districts or entire schools where, if you look at reading and math proficiency, they were at zero in some of these places.
That is something that is just unconscionable in the United States of America in modern history, that we would be at a place that giving that kind of disservice to families and children and I guess there's no surprise that you see the mayor of Chicago didn't win re-election the other night. He came in third place in that Democrat primary. When you see results like that and so I think both Republicans and Democrats across the board are looking for real solutions when it comes to education policy. And we're seeing just this year Iowa with Governor Kim Reynolds, We saw Utah, We've seen it right now play out in Arkansas as we talk with Sarah Huckabee Sanders with that really remarkable, I thought, inspirational response to President Biden's State of the Union a couple of weeks ago talking about just fundamental education, freedom where dollars almost wholly follow families and students and at the same time strengthening public education to be more outcomes oriented, to be more results focused and to give a quality education no matter the type of schooling parents choose, public, private, home school, charter school, all should be great options and so that's a big area of focus.
Energy development, we’ve seen this war on energy that started really in the Obama administration and certainly carried forward to the Biden administration. We've seen this radicalized new definition of ESG that's been used as a really a non-governmental way of controlling businesses and controlling individuals and really having a chokehold on American affordable and then the reliable energy. And then in the economy, we've seen some of the most difficult times that we've seen in recent memory. Whether you look at inflation at 40 year highs, whether you look at just this huge volatility in the market for equities, when we've seen just savings decimated between inflation and the downturn in the marketplace, we need real economic solutions. And so we talk about that quite a bit in this report and so those are the three top tier malig policy priorities. But we have some other just phenomenal things, no matter what kind of policy issue you're interested in or your state legislator is interested in, encourage you to download this Alec.Org. It's a free publication for everybody to take advantage of. And if you're in touch with your state lawmakers, talk to them about you're looking at just lots of great ideas that come in this report.
Linda J. Hansen: That's so good and listeners again that's ALEC.ORG. We'll give the web address again at the end of the interview, but you bring up some really good points. And that whole report about Chicago schools and the Baltimore schools where some of those districts had zero percent of the students could read at grade level, zero percent. And I look and I think, well, if they can't read at grade level, they certainly can't do math at grade level. And what does that mean for the future of America and the future for those students? I mean, we're crippling those individuals and that's just horrible. So to every listener out there, either you are a citizen who is paying taxes in your state, obviously, in your nation, but also maybe you are a newly elected official, maybe you're a new school board member, maybe you're a new representative in your state, a new city council member.
I mean, these policy solutions are something that can provide services for everybody. So I really encourage people to go and get this resource off your website, The Essential Policy Solutions for 2023. And the thing I love about what ALEC does with the Rich States, Poor States Guide, and with things like this policy booklet, is they keep it current, what worked in 1980 isn't. I mean, there's some basics that are going to work. As Art Laffer always says, if you tax something more, you get less of it, if you tax something less, you get more of it. So there are basics, right? But there's things that we need to adapt to in our current society. And ALEC always stays on top of that and helps state legislators and I would say then that trickles up to the federal legislators who can make better policy for citizens.
Jonathan Williams: Just a great example of that this week, for those of you that follow the U.S Congress, they just passed a House Joint Resolution led by many of our great ALEC Alums. We have nearly 100 ALEC alumni members of this Congress and they go from the state level to the federal level, and they just passed a resolution. That is basically what we're trying to do at the state level from an education perspective of battling back against I mentioned ESG a minute ago, just this radicalized version of ESG that is getting into it's one thing for someone to say, I want to invest on ESG principles with my own money. And I would say, God bless you. If you want lower returns, and higher fees that you pay for investing, that's your choice as an individual. We believe in individual liberty, individual freedom right at ALEC and as a key American principle. But the minute you start doing that with other people's money as an investment advisor or certainly overseeing these radically underfunded pension systems across the country for state and local government employees, that's a real problem. And so one of the newest ALEC Policy Solutions, which is included in this Essential Policy solutions document, is just getting back to the basics on pensions and saying, let's keep politics, whatever it is, left wing politics, right wing politics, whatever. Let's keep politically motivated decisions out of pension systems altogether and let's just focus on the best returns that we can get to help make up the gap on just these large, unfunded liabilities that we've spent over a decade writing about.
Linda, as really one of the existential financial crises, I think, facing states and cities across the country, but just this week the US House passed a resolution saying exactly what ALEC has been saying at the state level as states go out there and try to pass laws to shore up pension systems. They're saying to the Biden administration, which as you may have seen just recently through their Department of labor, gone back on the Trump Department of labor guidance that was very explicit, to say let's keep politically based investing out of pension systems. The Biden administration has tried to reverse that and say ESG not only is allowed, should be allowed, and should be followed by pension systems. The US House punched back this week to say let's keep any kind of political based investing out of pension system. So that's a perfect example of just how a good idea can come at the state level. And now we're seeing our alumni members here on Capitol Hill take it and run with it and really put up a valiant fight. Whether they're successful in this Washington or not, that remains to be seen. But they're putting out the staking, the important principle to say let's protect pensioners from ESG and other politics that try to get played.
Linda J. Hansen: That's so important and we must keep fighting, we must. For listeners who may not be familiar with ESG, The Environmental and Social Governance aspect that you're talking about. I mean, we know these acronyms because we talk about it all the time with these different policies, but there may be some listeners who are unaware of what ESG really is. And could you explain that for them and then explain why it is so harmful for people to invest that way? I could go into it, but I think I'd love to hear what you have to say.
Jonathan Williams: Well, I have two different, just very distinct ways of answering that question. One is that's a great question because I don't think anybody defines ESG the same way and that's one of the biggest problems with ESG. Environmental, Social Governance principles is it's laid out but it's in the eye of beholder? Of course. I think if you were to ask 100 people on the street what their view or definition of ESG is, you get 100 different answers. Probably if you ask 100 different policymakers on Capitol Hill or in state legislature they give you 100 different answers. And so to some degree you have to define something in order to be able to criticize it. So it sounds very good and in some cases I could make the case that my version of ESG might be very great and positive for market investing because I would focus on good governance ideas and things like that. But that belies just the inherent difficulty in discussing the issue as people are talking past each other. But let me give you the other part of the answer, which is, I think in practicality how it plays out. And that is the idea that this is being used as a weapon against businesses to intimidate them into politically correct behavior and lots of different implications of that, but then also to really put a chokehold on American energy. And I think it's being used by a lot of global organizations. You've seen it catch on big time in Europe. You've seen kind of the global alliance of different companies sign on to the net zero carbon emissions idea by 2050 although you've begun to see a crack in that armor. I don't know if you've seen the story recently. You probably have in the last couple of days where the CEO of Vanguard Investments said, enough is enough.
Here we want to focus on the core business issues for our organization and be good fiduciaries of our business and to return to shareholders and to treat our individual’s investments that we manage with our fiduciary care. And so they've actually broken away from some of these global efforts to really coalesce the financial industry, at least some of the major players into following the net zero guidelines. And so it's very interesting to see how this has played out. But essentially how it's played out at the state level in many cases is now as we kind of peel back the onion on this, state pension funds are being used as one of the biggest areas where the ESG principals have been able to use that for a left wing political purpose. So as we see different corporate board fights, let's say play out. The high profile one was with ExxonMobil about a year and a half ago where they had basically three green New Deal style investor types that were looking to take seats on the ExxonMobil board of directors. And of course you have this shareholder resolution battle at many times at the corporate level and we find that pension systems and their funds are being used to vote the shares of those funds against the businesses in many cases. And for the investor, the kind of the activist investors that are looking to pursue liberal political goals.
And one of the kind of the most striking examples of this that I still find shocking even a year and a half later is after we have seen the disclosures on the ExxonMobil board fight that I was talking about. One of the Texas large teacher pension systems actually voted their shares against the interests of oil and gas and against the wishes of ExxonMobil management and for these radical Green New Deal style board candidates. And you can imagine the look on the face of Texas policymakers when they find out that their own pension systems assets that are allegedly being used to continue these defined benefit plans and provide a secure retirement for teachers across the state, are being used to wage political battles against oil and gas, the native industry of Texas. So that's the kind of thing that we've seen play out, especially as it relates to the state level. There's lots of global elements of this, I mean, Al Gore talks about this all the time. He's just got the ouster of the world lead that was the Trump nominee over climate comments and so this is a much bigger issue, but as we see it play out at the state level a lot of it has to do with how pension systems are being weaponized unfortunately against heirs and retirees.
Linda J. Hansen: Very true, it's used against heirs and retirees. And for listeners, the ESG you want to look at where your money is being spent too. In a previous podcast episode, I interviewed the founder of Inspire Investing and basically he was working for a well-known investment firm and started to wake up and realize that these funds were being used for things he was just vehemently opposed to and he just couldn't sleep anymore. He had to quit his job and start his own firm to really come up with something that would be more aligned with his values. And so for everybody listening, not only for your state pension fund and your finances within the state policy levels and everything, but your own personal funds, you want to make sure that your money is funding the things you want. This parallel economy that's kind of growing up because conservatives are sick of funding things that they don't agree with, whether it's supporting China in all of our goods that come and could be made in America but we don't agree with. And this whole social governance too can be like the makeup of the boards, like you have to have a diverse makeup. It doesn't matter what the skill set is, the diversity is what matters and so we need to look at that altogether, So I really appreciate how ALEC has addressed all this and is able to give real solutions. You mentioned on the website that you offer so many policy solutions and model legislation. So whether you're a citizen or a legislator, you can go there and get ideas for really proactively promoting policies that do help every citizen. And I just can't say enough about it in the sense that these are proven policies at work. One of the things that we've talked about before here, we're talking about a wide range of policy with education, energy and the economy. But we've talked about the taxation and you've mentioned Utah always leads the way in the Rich States, poor States guide.
Jonathan Williams: 15 years in a row.
Linda J. Hansen: It's incredible, right? And sometimes these people in states think, well, how will we make money if we don't have taxes? And I worked for Herman Cain. And we loved nine. Nine. Nine. Right. That would have been a great federal tax plan in my mind. And there's people who still love that and still would love to see that as a more fair tax policy at the federal level. But what types of things are happening around the states that are really bolstering the economy of states but also helping citizens through reduced taxation?
Jonathan Williams: Yeah, there's so much going on that's very positive here. I know I was the inclination can be to be frustrated about inaction in Washington DC. And to hope that we could get fundamental breakthrough tax reform in DC. In the tax cuts of 2017 signed into law by President Trump, were a great step in the right direction to bring business taxes down and small businesses as well and do many things that were very, very positive that I think set states up on a very good track and a trajectory to where they're at today because right now states have historic budget surpluses and that really started with the 2017 Tax Cuts and Jobs Act. That was one of the very undiscussed elements of that was, it set up state budget surpluses as it relates to the federal tax base, broadening the states, then broaden their tax bases as a result because they conform with the federal policies generally. And we saw a bunch of surplus money start building and then of course, get to the pandemic. We had a dip in the revenues there for a couple of quarters at the state level, but then we saw revenues racing back for lots of reasons, especially the states that kept their economies open and resisted the urge to lock down and shut down businesses and stop in person education and things like that. But then we saw between federal pandemic related aid, the federal, I think it was a bailout of the states, what happened that Joe Biden ended up passing. I think we talked about that last time with the ARPA plan that sent lots of hundreds of billions of dollars to state and local governments. We've seen those elements and then we've seen states do remarkably well that continue to be competitive and grow jobs and especially the states that are attracting new individuals.
One of the key takeaways from our Rich States, Poor States Report every year is how Americans continue to vote with their feet, and they're leaving high tax states, big government states like California and New York, and droves between those two states just in the last year. This is shocking, Linda, you've probably seen this. The Census Bureau just came out with the last year's estimates of population flows between states between New York and California. They've lost over 500,000 people on net over the last twelve months alone. And they're going to places like Texas and Florida. Of course, the two big examples, they are both no income tax states, to your point, as being a key element of being a state that is really growing and being successful. Many other great examples there. But what we're seeing, though, across the states is not just the states with no income taxes, but we've seen incredible movement just in the last year. We coined it as the flat tax revolution. Steve Forbes obviously had the idea of running for President 20 or 30 years ago. Now, that vision stalled in Washington DC.
But let me just go through a couple of the really interesting numbers and how much progress has been made here. So as you probably know, Linda, Wisconsin was the very first state to have a state income tax, and that was before the federal income tax was even allowed under the Constitution with the passage of the 16th Amendment. Because let's not forget, the Founders didn't like the idea of an income tax and they thought it was incompatible with our system of government. And it took the progressive movement with Woodrow Wilson and others to change that course. And that's been something that's been, I think, affordable for the United States between that the 17th Amendment and some other progressive era developments. And that's been just crippling, I think, to the Founders vision of America. But that being said, Wisconsin was the first state to create an income tax, 1911, 120 years, give or take 110 years. We've had states that have income taxes in the grand total of that time period, we had only four states that went from progressive income taxes to single rate flat taxes in 110 years. Fast forward to 2022. We had five states just in 2022 alone go from progressive income taxes to flat taxes and that movement and just realizing and why did they do that?
A. The surpluses we talked about, they have historic surpluses. They know that if the money is not given back to taxpayers, in many cases it will be spent around state capitals, right? I mean, we certainly have the swap here in Washington, DC, some state capitals have their own swap, many state capitals have their own swap, and they realize that if the money is sitting there, it's going to be spent. And they wanted to get it back to taxpayers to put it in use in their homes and their businesses into the market. And so what we saw then was the surplus money driving this, the idea that the federal government was failing us in many cases and not cutting taxes and we're seeing these record high inflation numbers. People needed money to actually make ends meet and to be able to provide for their families and to be able to have enough in many cases even go on vacation the way that gas prices were there in the summer months. Right? And so we saw policymakers starting in Iowa under Governor Kim Reynolds, who is an ALEC Alum, by the way, very proud of that fact. She had given the response to President Biden's State of the Union in 2022 and just a couple of hours earlier she had signed into law the Iowa flat tax that moved their tax rates from above 8%, now eventually below 4%. So cutting it in half and going to a single bracket to make Iowa dramatically more competitive with regional states, I mean, especially all the things that have been done, great things during the Scott Walker years in Wisconsin and many surrounding states become more competitive. Iowa realized it was becoming an outlier, they wanted to see more population growth, they knew that Iowa needed to change the way they did business in order to grow. Not long after, we saw our friends in Mississippi and Georgia, Arizona and Idaho all become flat tax states last year. And so that is, I think, a movement in the direction that many of them want to continue to get to zero.
They want to start at a flat rate, begin to cut down income tax rates, and then get to zero over time. I mean, I think we're going to see an agreement has already been announced in North Dakota to create a flat tax and probably go to a 2% or one and a half percent flat tax rate, which would be the lowest of any state that has an income tax with the goal of getting to zero over time. Because they see the benefits of Texas and Florida and Tennessee and some of the most quickly growing, most prosperous states. Talk about Prosperity 101, that is one of the most key lessons at the state level is if you can do without an income tax or if you can have that rate as low as possible, that's going to be the biggest bang for the buck that you can get when cutting taxes because all taxes matter. Laffer talks about this all the time and you take a productive dollar out of the private economy and put it into the government sector, you're going to have an efficiency loss. But not all tax cuts are graded equally, as we like to say, the income tax is the most damaging form of taxation that you can have in any level of government. That's just not our research from rich states, poor states. That's the academic work that's OECD research and developed world economies. That is the consensus around what works and what doesn't work. And that's the great thing about ALEC and that's the great thing about 50 states is its practical, right?
These are the laboratories of democracy, they have to realize that they are competing against states all across the country for new jobs and business development. If it doesn't work, there's only so much you can do to protect yourself. There's no such thing as building a wall around your state to keep your people and keep your businesses there. And that's the lesson, unfortunately, that California and New York and Illinois and these high tax states continually learn and of course that's the benefit for the states that get it right. You have an amazing ability to grow your tax base, grow those jobs, and bring in employers to make yourselves more prosperous over time and that's what we're seeing every single year.
Linda J. Hansen: Absolutely. And I know that there's talk of even doing this at the federal level. I mean, there are people who are saying let's get rid of the IRS and I'd be cheering for that. But there's ways that we can still fund our economy without this progressive income tax that is so crippling for people and without 87,000 new IRS agents that we're all paying for. So there are ways to fund government without an income tax and it's exciting to think about. So these laboratories of democracy that you talk about, for everybody listening, you can go to the Alec.org website and see some of the really positive things that have been happening and it'll wake up your ideas for new ways to help your own state or your city. I mean, these are things that are proven and measurable and we can really benefit from those who've gone before us in creating these really great policies.
Jonathan Williams: Yeah, I should that's also, richstatesportstates.org is a way that everyone can go to see how your state ranks. In rich states, poor states, we mentioned Utah at number one for all 15 years so far, New York at number 50, Surprise, some of the highest taxes, also some of the biggest out-migration we talked about. There is a clear link between high income tax rates and out-migration and no income taxes and in-migration and it's very hard to ignore both on the current numbers and this year. But also we go back 25 years with our data now that we've produced at richstatesportstates.org, allows you to pull up your own state, see how you rank and then we even empower everyone. It's kind of a fun tool that we allow you to click adjust policies to say what if we became a no income tax? Say I know it's being talked about in Wisconsin right now and other states across the country and it would allow you to see what that would do to your rich states, poor states, economic Outlook Score if you, let's say, became a right to work state or became a state that is doing without an income tax. But one thing I did want to mention that I think is so important as part of this discussion around taxes, you kind of alluded to it in your comments. Is how do we pay for everything that if you don't have an income tax? That's a great question because I just got asked about it the other day when I was giving a talk. It's not like we're anarchists here. There is a level of government that you need, right, to cover the basics of core government services, and every state decides how many services at what level that you want to fund them at. But the key element of that is the nine no income tax states versus, let's say, the 41 states with income taxes. One of the, I think best ways to kind of sort out those two differences of states is the no income tax states, depending on the year, almost always in aggregate, spend between 50 and 60% per capita less than the 41 states with income taxes.
So it's not that they're just shifting around the deck chairs on the ship and saying we're going to have no income tax, but we're going to exorbitantly tax you on property or sales or other things. That's a bit of a misnomer. It's used as a straw man argument to say why we shouldn't cut income taxes or eliminate income taxes because they use the scare tactic to say, well, property taxes are going to go through the roof. It's like time out, time out. That's not how it works, what happens at the state level is the states that get it right over the long term are going to have lower, more efficiently given spending levels that allow them to have no income taxes. If you kind of squeeze a balloon in one side, you don't cut spending and you have big government, you're going to have really high taxes on the other side. But guess what? The Nine States that go without a personal income tax by and large spend much more prudently, which then gives them that ability to just be these uber-competitive states for new business development and job growth.
Linda J. Hansen: Well, true and in another episode, we can always discuss corporate tax rate too, because states that offer a lower corporate tax rate for businesses attract more businesses. I mean, it's logical, It's common sense and so they have increased revenues, they have more businesses in their state, they have more people that live in their state, jobs come to their states. And so even reducing like that corporate tax rate is really important. And again, I'll just repeat Dr. Art Laffer if you want more of something, tax, it less, if you want less of something, tax it more. And with that, I just thank you so much. Before we close, if you could say something to employers about what they should say to their employees about the importance of these tax policy issues and these policy solutions mentioned in your booklet offered by ALEC, what would you say to employers?
Jonathan Williams: Well, it's so important to have honest and open dialogue with employees as to what are the things that matter for businesses and what are the things that matter to economic health and the ability to continue to pay your employees and treat them well. Right. And to give them good benefits and to be able to see that upward mobility. And a lot of that depends on how successful the bottom line is of the company and where do they locate that becomes more possible to have that success. Right? And we see this happening all the time. It's not just individuals leaving California, New York and the high tax states and droves, It's businesses both large and small, C-corps and mom and pop, single entrepreneurs, right? And startup businesses relocating. And I think having that open dialogue, though, and talking about why is it that our company, let's say, left California and went to Texas? Because I tell this often, and now having two small kids at home, I know it 100% to be accurate, 110% accurate is the fact that when we're so busy, the average American family is so busy just getting their kids to soccer practice on time that they don't have really the time or the opportunity to follow a lot of things we're talking about today.
So having that conversation for those that might not have time to go to Richstatesportstates.org although they should, having that open discussion saying these are the type of policies of free market economy, lower taxes for everybody that enhance individual liberty that enhance federalism about these big topics we've been talking about and the principles that really made America great over our 250 years of history, nearly now. And those are the things that we need to talk about and connect the dots for people because whether it's employers, whether it's getting involved with the chambers of commerce or business organizations at many times across parts of the country at least are not all that free market anymore. And having that important voice within those groups to say let's talk about the principles of free enterprise and what made America great and what's going to keep businesses healthy and growing which it of course is good for individuals. Because at the end of the day, one of the most key principles I think there is, there is businesses don't pay taxes, people pay taxes. And so everything done to a business is not done to that inanimate object or a business entity or a building. It's done to all of us.
We all pay that higher tax on businesses, whether its lower wages, worse returns in our 401 K’s or pension funds or higher prices at the store. And those kind of key economic principles are so important. And I think the key message is don't be afraid to talk about those issues, not on a partisan basis, but on an educational basis of why your employees and why individuals across the country need to be informed of what's going on.
Linda J. Hansen: Absolutely. Well, thank you for that, because they do need to be informed. And that's why I do Prosperity 101 to help people be informed voters and know how to protect their own prosperity when they go to the voting booth. But you brought up a really good point, businesses don't pay taxes. People pay taxes. So if there's a high corporate tax rate in your state and a high income tax rate, I mean, just stop to think about how much of your income is being used just to pay taxes, which are often inefficiently spent, and the government is just bloated and uses money poorly. We can see this all the time with our federal government. And every state government, I'm sure, has ways they can cut, just like every home can cut expenses sometimes when we need to, and we can do the things that help us thrive.
So, Jonathan, thank you so much for taking time for this interview again, it's always just a pleasure to have you back. I love being able to highlight the really great policy solutions that your ALEC members are coming up with and that you're able to highlight through Rich States, Poor States dates. So listeners, go to richstatesportstates.org, go to ALEC.org and get this news booklet, The Essential Policy Solutions for 2023. And if they want to contact you, Jonathan, how should they do that?
Jonathan Williams: Yeah, Jaywilliams@alec.org, feel free to send us a note. We'd love to hear your thoughts on our work or ways that you'd love to get involved with ALEC overall. And if you were in touch with your state legislators. We are an individual membership organization of state legislators. We don't ask for government support to cover their involvement with us. We'd love to have you talk with your state legislator about becoming an ALEC member and really joining this movement for freedom and better policy across the states.
Linda J. Hansen: Well, that's so true, and for state legislators listening, it really is valuable. I've been honored to speak at some ALEC conferences and attended many, and I always learn, even though I'm not a state legislator, and I've been able to share a lot of different policy solutions and learn about many policy solutions. So thank you for the work of ALEC, thank you for what you do, and thank you for being with us today.
Jonathan Williams: Well, great to join you, my friend. It's always a pleasure.
Linda J. Hansen: Thank you.
Linda J. Hansen: Thank you again for listening to the Prosperity 101 Podcast. If you enjoyed this episode, please subscribe, share, and leave a great review. Don't forget to visit Prosperity101.com to access the entire podcast library to order my newest book, Job Security Through Business Prosperity: The Essential Guide to Understanding How Policy Affects Your Paycheck or to enroll you or your employees in the Breakroom Economics online course. You can also receive the free e-book, 10 Tips for Helping Employees Understand How Public Policy Affects Their Paychecks. Freedom is never free. Understanding the foundations of prosperity and the policies of prosperity will help you to protect prosperity as you become informed, involved, and impactful. I give special thanks to our sponsors Matthews Archery, Inc. and Wisconsin Stamping & Manufacturing. Please contact us today at Prosperity101.com to let us know how we can serve you. Thank you.