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Michchamp
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Unlike most Red States, where they advocate huge tax cuts, but don't pass them, and blame taxes on the Democrats and Obama, Kansas under Gov. Sam Brownback dove headfirst into massive tax cuts, under that stupid line of reasoning that tax cuts actually produce more tax revenue, more jobs, etc.
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"The governor proposed to cut income taxes on the state's highest earners from 6.45 percent to 4.9 percent, to simplify tax brackets, and to eliminate state income taxes on most small business income entirely. In a nod to fiscal responsibility, though, he proposed to end several tax deductions and exemptions, including the well-liked home mortgage interest deduction. This would help pay for the cuts. "I'm gonna sign this bill... and I'm very thankful for how God has blessed our state"
Yet as the bill went through the state Senate, these deductions proved too popular, and legislators voted to keep them all. The bill's estimated price tag rose from about $105 million to $800 million, but Brownback kept supporting it anyway. "I'm gonna sign this bill, I'm excited about the prospects for it, and I'm very thankful for how God has blessed our state," he said.
Democrats, and some Republicans, weren't buying it. "It bankrupts the state within two years," said Rochelle Chronister, a former state GOP chair who helped organize moderate Republicans against Brownback's agenda. And the House Democratic leader, Paul Davis, laid down a marker. "There is no feasible way that private-sector growth can accommodate the price tag of this tax cut," he said. "Our $600 million surplus will become a $2.5 billion deficit within just five years." In return, Brownback's administration claimed the bill would create 23,000 jobs by 2020, and would lead 35,000 more people to move to Kansas."
spoiler alert: no business or people moved to Kansas because of the tax cut, and now they're facing the massive deficits every sane person predicted.Yet as the bill went through the state Senate, these deductions proved too popular, and legislators voted to keep them all. The bill's estimated price tag rose from about $105 million to $800 million, but Brownback kept supporting it anyway. "I'm gonna sign this bill, I'm excited about the prospects for it, and I'm very thankful for how God has blessed our state," he said.
Democrats, and some Republicans, weren't buying it. "It bankrupts the state within two years," said Rochelle Chronister, a former state GOP chair who helped organize moderate Republicans against Brownback's agenda. And the House Democratic leader, Paul Davis, laid down a marker. "There is no feasible way that private-sector growth can accommodate the price tag of this tax cut," he said. "Our $600 million surplus will become a $2.5 billion deficit within just five years." In return, Brownback's administration claimed the bill would create 23,000 jobs by 2020, and would lead 35,000 more people to move to Kansas."
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Kansas is the poster child for cutting taxes sharply in line with recommendations of the American Legislative Exchange Council, or ALEC. Its calls for deep tax cuts and limits on revenues and spending reflect extreme "supply side" and anti-tax arguments that mainstream economic research discredited long ago, as my Center on Budget and Policy Priroties colleagues explain here.
Now, we see that these policies have been a budgetary disaster for Kansas. So much so, my CBPP colleague Nick Johnson reports, ?that leaders in Oklahoma, Nebraska, and other states are expressing concern about the Kansas results and distancing themselves ? at least rhetorically ? from the Kansas failures.?
How badly is Kansas faring? State revenues have plummeted, employment growth continues to lag the national average, and the state?s credit rating has been downgraded. Kansas? tax cuts this year are costing the state about 8 percent of the revenue it uses to fund schools, health care and other public services, a hit comparable to a mid-sized recession, according to this CBPP report. The revenue loss, state data show, will rise to 16 percent in five years if Kansas doesn?t reverse the tax cuts.
Now, we see that these policies have been a budgetary disaster for Kansas. So much so, my CBPP colleague Nick Johnson reports, ?that leaders in Oklahoma, Nebraska, and other states are expressing concern about the Kansas results and distancing themselves ? at least rhetorically ? from the Kansas failures.?
How badly is Kansas faring? State revenues have plummeted, employment growth continues to lag the national average, and the state?s credit rating has been downgraded. Kansas? tax cuts this year are costing the state about 8 percent of the revenue it uses to fund schools, health care and other public services, a hit comparable to a mid-sized recession, according to this CBPP report. The revenue loss, state data show, will rise to 16 percent in five years if Kansas doesn?t reverse the tax cuts.
