Economy

Tax Cut Magic and Why Kansas is Still F*cked

Under the stewardship of Governor Sam Brownback, the state government has already taken some steps toward plugging a hole in the state budget through spending cuts, but revenue forecasts released this week show that an even bigger hole has emerged.

The state is now facing a $400 million hole.

With Kansas’ economy growing at a slower rate than the rest of the country, fiscal analysts reduced the state’s revenue estimates by $200 million for fiscal years 2016 and 2017, increasing the budget deficit lawmakers must tackle.

While income tax receipts are expected to hold steady the next two years, the state suffers from losses in severance taxes because of a soft oil and gas market and a decline in corporate income taxes.

As you may recall, some school systems in Kansas will be forced to close early this year because they simply do not have enough money to stay open. They don't have enough money because Governor Brownback and the state legislature cut education funding in the middle of the school year to make up for a deficit generated by Brownback's signature tax cuts.

It's only going to get worse from here because the path of least resistance for attempting to close the gap is through a series of consumption taxes that adversely affect the poor and working class while the rich and wealthy benefit greatly from the elimination of income taxes.

And an even greater problem lies on the other side of this conservative economics shit show.

After all is said and done -- when income taxes have been eliminated and replaced by a flat tax -- the problems will not only persist but grow larger. Trickle down economics doesn't even work on paper without a generous punctuation of magic asterisks and it sure as hell doesn't work in practice as we can see for ourselves.

In 2016, Republican candidates will be running on a platform that calls for implementing the Kansas model in all 50 states.

Some of them already are. Ted Cruz and Rand Paul have both called for eliminating income taxes in favor of a flat tax.

  • j hentai
    • muselet

      Hmm.

      It’s an interesting concept. Not without its flaws, but interesting.

      If, as the disgusting and worthless Charles Murray (you know, the walking pustule who co-wrote the most politely racist book published in the past half-century or more, The Bell Curve) suggests, basic income replaced current assistance programs (Medicaid, nutrition assistance, housing assistance, what have you), then the poor would wind up much worse off. Maintaining benefits while also providing a basic income could be a way of helping people climb out of poverty, as the experience of Dauphin MB shows.

      Implementing a basic income scheme would be complicated—for example, it presupposes available banking services—and infeasible in our current political climate—Soshulizm!—but it’s certainly worth serious consideration.

      –alopecia

      • j hentai

        i do agree, charles murray is reprehensible!

  • Christopher Foxx

    In 2016, Republican candidates will be running on a platform that calls for implementing the Kansas model in all 50 states.

    And smart Democratic candidates will be pointing that out at every opportunity.

  • BillWestern

    While I feel rather sorry for the good citizens of Kansasistan (at least the 40 some percent who didn’t vote for Brownback) I see this as great news. The supply siders have long argued that their economic fantasies are real, but there have been few unambiguous examples. Maybe the Kansasistan experiment finally puts the nail in the coffin of this silly idea.

    • muselet

      Never happen. Trickle-Down Economics (we all know what flows downhill, right?) is harder to kill than a zombie vampire wearing Kevlar.

      –alopecia

      • Christopher Foxx

        Or, as someone once called it, “voodoo economics”.

        Hmmm, now who was that…?

      • Draxiar

        Under the tenacious belief that conservatism can’t fail but can only be failed it’ll take a shift in generational thinking to double tap that zombie vampire.

  • muselet

    The tax cuts that Brownback pushed through the Legislature were sold as a way to charge up the Kansas economy in the aftermath of the Great Recession.

    However, fiscal analysts pointed out that the state is still struggling when compared to the rest of the country, even as the Brownback administration touts data that it claims show the Kansas economy is thriving.

    The results of Sam Brownback’s self-described experiment are in, and they don’t look good for the hypothesis under test. When you have to argue that bad news really is good news if you squint hard and hold your mouth just so, you’ve long since stopped arguing in good faith.

    (Incidentally, Ashby, the “flat tax” is a proposal that all income is taxed at a single rate; the “fair tax” is a proposal to eliminate the income tax and replace it with a national consumption tax. Both are terrible ideas, both rely on economic smoke and mirrors, both would be catastrophic for all non-plutocrats, and neither would ever be implemented in any sane or even semi-sane nation, but they’re not the same thing.)

    –alopecia

    • JMAshby

      Yes. In either case, it’s a massive tax hike on the working class and a massive giveaway to the rich. The outcome is the same. You’re imposing whole new classes and areas of taxation so you can turn the wealthy into even bigger free-loaders than they already are.