Kansas's Tax Cut Failure Is Complete

The New York Times editorial board takes Kansas Republicans and Gov. Sam Brownback to task for destroying the state's economy by literally creating a recession through draconian cuts to government services.

There was a windstorm of hasty excuses in recent weeks after Kansas reported that it took in $338 million less than expected in the 2014 fiscal year and would have to dip heavily into a reserve fund. Spending wasn’t cut enough, said conservatives. Too many rich people sold off stock in the previous year, state officials said. It’s the price of creating jobs, said Gov. Sam Brownback. 

None of those reasons were correct. There was only one reason for the state’s plummeting revenues, and that was the spectacularly ill-advised income tax cuts that Mr. Brownback and his fellow Republicans engineered in 2012 and 2013. The cuts, which largely benefited the wealthy, cost the state 8 percent of the revenue it needs for schools and other government services. As the Center on Budget and Policy Priorities noted, that’s about the same as the effect of a midsize recession. Moody’s cut the state’s debt rating in April for the first time in at least 13 years, citing the cuts and a lack of confidence in the state’s fiscal management. 

The 2012 cuts were among the largest ever enacted by a state, reducing the top tax bracket by 25 percent and eliminating all taxes on business profits that are reported on individual income returns. (No other state has ever eliminated all taxes on these pass-through businesses.) The cuts were arrogantly promoted by Mr. Brownback with the same disproven theory that Republicans have employed for decades: There will be no loss of revenue because of all the economic growth!

And of course, because the voodoo economics of Laffer Curve nonsense never work, the Kansas tax cuts failed spectacularly.

But the growth didn’t show up. Kansas, in fact, was one of only five states to lose employment over the last six months, while the rest of the country was improving. It has been below the national average in job gains for the three and half years Mr. Brownback has been in office. Average earnings in the state are down since 2012, and so is net growth in the number of registered businesses.

And of course the big reason why is that when you cut thousands of state government employees and put them on unemployment, they don't exactly contribute to the economy as much as they would if they were working.  America's super rich aren't exactly flocking to Kansas to enjoy lower taxes, nor are businesses flocking to the state when they know they're going to have a rough time convincing people to move there to take jobs when schools and teachers are being slashed to ribbons.

By the way, Brownback is having troubles in the polls due to this mess and he's sinking fast.  No surprise there as he's up for reelection in November, and Democrat Paul Davis looks like he's going to make Brownback pay.