Wednesday, June 21, 2017

We Can Only Wish that Politicians Would Learn a Lesson from Sam Brownback’s Failed Tax Cutting | janresseger

We Can Only Wish that Politicians Would Learn a Lesson from Sam Brownback’s Failed Tax Cutting | janresseger:

We Can Only Wish that Politicians Would Learn a Lesson from Sam Brownback’s Failed Tax Cutting

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It’s budget season. At the federal level, Congress will soon consider the President’s proposed 2018 budget. And many states are up against a June 30th deadline: the end of Fiscal Year 2017 and the deadline for approving a new budget. Yesterday’s post examined the catastrophic programmatic implications of President Trump’s federal budget proposal. Today the focus will be a little different— taxing policy at the state, not the federal level, and the tax slashing that continues to underpin much budgeting in 2017. Please continue reading; I promise this post will not be overly technical.
Much of the talk about state taxing policy these days relates to what just happened in Kansas. Both houses of the Kansas Legislature had voted to overturn several years of Governor Sam Brownback’s tax cutting and at the same time to eliminate a special taxing innovation that reduced business taxes on pass-through income. Governor Brownback, whose dedication to tax cutting is undeterred, vetoed the Legislature’s big tax increase. But two weeks ago, the Legislature—both houses dominated by Republicans—overrode Governor Brownback’s veto. Since Gov. Brownback initiated his experiment with tax cutting, Kansas has fallen into a fiscal crisis, and its public schools had suffered from lack of funding. Earlier this spring, the state’s supreme court had presented an ultimatum to the Legislature: improve school funding by June 30, or school will not open in September.
Brownback has called his tax cuts a real life experiment in supply-side economics. His hypothesis? That the state’s economy would thrive because everybody would be drawn to low-tax-Kansas to open businesses. Explosive economic growth, he predicted, would follow the tax cuts.  Here is Michael Tomasky, writing for the NY Times about how the experiment turned out: “Kansas, under Gov. Sam Brownback, has come as close as we’ve ever gotten in the United States to conducting a perfect experiment in supply-side economics. The conservative governor, working with a conservative State Legislature, in the home state of the conservative Koch brothers, took office in 2011 vowing sharp cuts in taxes and state spending…. The taxes were cut, and by a lot. The cumulative cut was forecast to be $3.9 billion by 2019… The cuts came. But the growth never did… The experiment has been a disaster… Finally, even the Republican Kansas Legislature faced reality.”
Tomasky traces some of this back to Grover Norquist: “Republicans are not supposed to raise We Can Only Wish that Politicians Would Learn a Lesson from Sam Brownback’s Failed Tax Cutting | janresseger:
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