"Kansas has made national news with its fiscal policy in 2013–14. The state’s tax cuts were large, but we show that their projected outcome brings Kansas’s state-level tax burden only slightly below the national average (5.0 percent of income), while its local tax burden (4.1 percent of income) is a little above the national average. Kansans have little choice among local governments: only one jurisdiction for every 200 square miles across the state. The state spends much less than average on business subsidies, but government employment is much higher than average (15.0 percent of private employment). Government debt peaked at 24 percent of income in 2008 and is now down to about 21 percent."
Reason why this is not important is if your only path of attack is through the "who did it" path and you have nothing whatsoever to say about the actual content, maybe you should base your attack on more solid ground. Should be easy: OP gave us facts to verify, not an opinion. If his facts are indeed facts you will need more than merely point to the Koch brothers, regardless of their well-known agenda.
Context is important because the number of true facts we can spout about the economy of Kansas is legion and its highly likely a propaganda shop has cherry picked the ones they deliver.
Sadly, OPs linked claims don't tell us anything about Kansas' performance under these tax cuts which is really what matters since the point of the tax cuts was to supercharge growth. Did that happen? I'm going to say no:
...the point of the tax cuts was to supercharge growth.
No, the point is that we subjects get to keep more of the resources for which we work.
Any primarily agricultural state would have had trouble "supercharging growth" over that period. Also Kansas sucks, so it's perfectly possible that "tax cuts" were implemented as direct handouts to the Koch brothers, which of course I wouldn't defend. The general idea of tax cuts is fine, though. b^)
You're technically correct, I think -- the actual point isn't to super-charge growth.
But without massive spending cuts, you need supercharged growth to offset lost revenue. The premise of Kansas-style tax policy -- which coincides in spirit with Trump's proposed tax policy -- is that you can avoid massive spending cuts by supercharging growth.
Without that premise, these tax policies would be much more difficult to push through. Because they'd have to admit massive deficit spending, or else come pre-packaged with huge cuts to popular services.
So, the end goal isn't necessarily to supercharge growth, but the promise to supercharge growth is a huge aspect of what makes these tax plans politically viable.
> No, the point is that we subjects get to keep more of the resources for which we work... Any primarily agricultural state would have had trouble "supercharging growth" over that period.
You are moving the goalposts after the experiment has failed. Before these tax reforms were passed, their advocates said over and over that the point was to supercharge growth, and that the tax cuts would surely accomplish that.
I'd prefer a more progressive mix that deemphasizes sales taxes in favor of income taxes.
But most stories describe this as some kind of suicide pact. That seems somewhat extreme.
Yes, there was a budget crunch after this, but the same budget crunch was felt in similar states without tax policy changes, most likely driven by lingering impacts of the great recession and changes in federal tax policy.
Al Franken had a great line about media bias in Lies and the Lying Liars Who Tell Them. He said everyone thinks the media is biased towards right or left when it's really just biased towards calamity and sensationalism.
Cato is right-wing, but the rest of the world is trying to sell you papers. Caveat emptor either way.
EDIT: Hmm, tried to provide a balanced reply with more neutral sources with a level tone. Downvote was a good reminder that Politics is the Mindkiller.
I would think that the Cato Institute indicating that the tax reforms had little effect would make the argument more credible. Their bias is to be in favor of tax cuts.
Parse it more closely; they're not arguing that the tax reforms had little effect on the state, they're arguing that they had little effect on the tax burden at the state level. Their only metric for measuring success is whether or not taxes are lower -- which is fine since they're a partisan advocacy group, but real humans live there too and they have to live with all of the impacts that Cato doesn't concern themselves with.
I've never much considered accelerationism to be a practical concern but Kansas makes me wonder if perhaps it's the way forward. So many tax cuts and now people are voting out extreme Republicans for more moderates and voting for more taxes. Brownback still has the veto which is holding things back a bit but the state has moved left.
The constant threat of veto due to this has repeatedly shut down legislation on this a number of times now. It's was overruled and vetoed once already.
Our main problem is that Brownback, refuses to budge on it. There are also quite a few of our state legislators that own fill as Schedule S corps and therefore pay no state income tax, they have no reason to even try and repeal it.
Many of the staunch far right were ousted, but we have a long way to go. We currently have 1 month to find $800m and Brownback refuses to even put the tax exemption on the table, which would raise about half of our shortfall.
Most likely, we'll have higher regressive taxes (again) next year. For example lookup Kansas' food tax rate, it's one of the highest in the nation.
It is sad what's happening in KS. I spent many years there and lower taxes would be a big incentive to help me come back. This attempt has only scared me further away, as the tax cuts almost exclusively apply to corporations instead of individuals, and as the state and many local governments have been forced to jack up sales taxes to compensate.
Brownback was far too quick on the draw with this one, and his obstinance is not doing the state any favors. His main interest in the governorship was using it as campaign fodder, which it looks like he may still attempt, but which I don't think will be successful for him at this point.
It is true that a combination of media hysteria and panic incited by local teacher's unions have exaggerated the impact, but it really just shows that Brownback is not a worthy political operator. The point of politics is to get what you want with minimal resistance/negative impact. If you forget that last part of things, you won't have what you want very long.
There was nytimes article some time back comparing how CA and KS did after former increased state taxes and the latter decreased. I am sure there are other factors but the gist of it was cutting taxes does not necessarily result in economic expansion. GDP of Kansas decreased over the period whereas CA's increased.
I've seen this but I don't think it is fair. Look at the amount of VC $$ going into CA vs. KS. Easy to create economic expansion when money is invested in your state.
Since part of the premise of the KS tax cuts and others like them is that they will attract business investment, the fact that the imbalance you point to continues to exist is not an excuse for the failure of KS tax cuts to produce positive economic results, since that's exactly what they were sold as changing.
Valid point. They should of went with tax free until disbursement like Estonia. Would of kept the money in the business and given them more of an incentive to reinvest.
Eh you're going to have to do better than a smiley face to support your statement. Taxation's purpose is to pay for the infrastructure in which those who are taxed may thrive. Of course the effectiveness of that arrangement varies from taxation being theft to it being the lifeblood of Utopia.
I'm a big Planet Money fan, and remember this episode. As I listened, it occurred to me that I really wished we had a non-partisan, uniform way to measure "experiments" like this over time. Agree on measures of success (GDP, per capita income post-tax, employment, education stats, etc.), visualize them over time, and run 50 parallel experiments. http://usafacts.org/ comes close, though it doesn't show state-level details. Also, one could argue it's not non-partisan behind the scenes (or that non-partisan is impossible).
I understand that might be a bit naive, but in general we could be doing much better at gathering and visualizing the data that are used to make policy decisions. Give me cold, hard numbers and pretty graphs instead of our current system of hotheads yelling that I'm a socialist if I believe in government spending or hate poor people if I believe in tax cuts.
We might be slowly starting to creak in that direction. The AEI recently announced that they would start preregistering studies on the link between the minimum wage and unemployment and fix the "success criteria" ahead of time.
The AEI is hardly my favorite institution, so it's actually especially encouraging to see them "go first". Hopefully others will follow.
> It’s important to note here that while decreasing taxes is generally associated with greater economic growth, the pass-through carve out is primarily incentivizing tax avoidance, not job creation.
> If they passed a provision like this in Washington, D.C., where I live and work, I would go to my employer the next day and ask them to start paying me as an independent contractor. I would still be doing the same job and contributing the same value to the economy, I just wouldn’t be paying any income taxes.
> The individual income tax is one of the largest instruments in the Kansas revenue toolkit. Exempting pass-through income substantially narrowed the tax base of that instrument, and in a haphazard and unpredictable way.
30 comments
[ 3.0 ms ] story [ 34.7 ms ] thread"Kansas has made national news with its fiscal policy in 2013–14. The state’s tax cuts were large, but we show that their projected outcome brings Kansas’s state-level tax burden only slightly below the national average (5.0 percent of income), while its local tax burden (4.1 percent of income) is a little above the national average. Kansans have little choice among local governments: only one jurisdiction for every 200 square miles across the state. The state spends much less than average on business subsidies, but government employment is much higher than average (15.0 percent of private employment). Government debt peaked at 24 percent of income in 2008 and is now down to about 21 percent."
https://www.freedominthe50states.org/overall/kansas
Their headquarters is in Kansas.
So it's may just be suspect and an alternative source would be better.
Sadly, OPs linked claims don't tell us anything about Kansas' performance under these tax cuts which is really what matters since the point of the tax cuts was to supercharge growth. Did that happen? I'm going to say no:
http://econbrowser.com/archives/2016/10/the-kansas-economy-t...
http://econbrowser.com/archives/2016/12/trends-in-kansas-gdp
Predictive value of conservative "freedom" rankings:
http://econbrowser.com/archives/2015/07/the-information-cont...
Commentary on Kansas budget by former Kansas Republican Budget Director (former for both):
http://www.kansasbudget.com/
No, the point is that we subjects get to keep more of the resources for which we work.
Any primarily agricultural state would have had trouble "supercharging growth" over that period. Also Kansas sucks, so it's perfectly possible that "tax cuts" were implemented as direct handouts to the Koch brothers, which of course I wouldn't defend. The general idea of tax cuts is fine, though. b^)
But without massive spending cuts, you need supercharged growth to offset lost revenue. The premise of Kansas-style tax policy -- which coincides in spirit with Trump's proposed tax policy -- is that you can avoid massive spending cuts by supercharging growth.
Without that premise, these tax policies would be much more difficult to push through. Because they'd have to admit massive deficit spending, or else come pre-packaged with huge cuts to popular services.
So, the end goal isn't necessarily to supercharge growth, but the promise to supercharge growth is a huge aspect of what makes these tax plans politically viable.
You are moving the goalposts after the experiment has failed. Before these tax reforms were passed, their advocates said over and over that the point was to supercharge growth, and that the tax cuts would surely accomplish that.
LOL
Anyway - once again you did NOT respond to what OP wrote. What you did has a name: Whataboutism.
Care to say something about what OP actually wrote? Is he right or wrong? Should be easy to prove him wrong since he made very concrete claims.
Worth checking anyway, because it's any single source.
If you look at property and vehicle taxes, they're a little above average: https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer...
From the same site, income taxes are a little below average but not zero.
Sales taxes are decidedly higher than average (in part due to local taxes): https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...
I'd prefer a more progressive mix that deemphasizes sales taxes in favor of income taxes.
But most stories describe this as some kind of suicide pact. That seems somewhat extreme.
Yes, there was a budget crunch after this, but the same budget crunch was felt in similar states without tax policy changes, most likely driven by lingering impacts of the great recession and changes in federal tax policy.
Al Franken had a great line about media bias in Lies and the Lying Liars Who Tell Them. He said everyone thinks the media is biased towards right or left when it's really just biased towards calamity and sensationalism.
Cato is right-wing, but the rest of the world is trying to sell you papers. Caveat emptor either way.
EDIT: Hmm, tried to provide a balanced reply with more neutral sources with a level tone. Downvote was a good reminder that Politics is the Mindkiller.
Our main problem is that Brownback, refuses to budge on it. There are also quite a few of our state legislators that own fill as Schedule S corps and therefore pay no state income tax, they have no reason to even try and repeal it.
Many of the staunch far right were ousted, but we have a long way to go. We currently have 1 month to find $800m and Brownback refuses to even put the tax exemption on the table, which would raise about half of our shortfall.
Most likely, we'll have higher regressive taxes (again) next year. For example lookup Kansas' food tax rate, it's one of the highest in the nation.
Brownback was far too quick on the draw with this one, and his obstinance is not doing the state any favors. His main interest in the governorship was using it as campaign fodder, which it looks like he may still attempt, but which I don't think will be successful for him at this point.
It is true that a combination of media hysteria and panic incited by local teacher's unions have exaggerated the impact, but it really just shows that Brownback is not a worthy political operator. The point of politics is to get what you want with minimal resistance/negative impact. If you forget that last part of things, you won't have what you want very long.
I understand that might be a bit naive, but in general we could be doing much better at gathering and visualizing the data that are used to make policy decisions. Give me cold, hard numbers and pretty graphs instead of our current system of hotheads yelling that I'm a socialist if I believe in government spending or hate poor people if I believe in tax cuts.
The AEI is hardly my favorite institution, so it's actually especially encouraging to see them "go first". Hopefully others will follow.
From his testimony:
> It’s important to note here that while decreasing taxes is generally associated with greater economic growth, the pass-through carve out is primarily incentivizing tax avoidance, not job creation.
> If they passed a provision like this in Washington, D.C., where I live and work, I would go to my employer the next day and ask them to start paying me as an independent contractor. I would still be doing the same job and contributing the same value to the economy, I just wouldn’t be paying any income taxes.
> The individual income tax is one of the largest instruments in the Kansas revenue toolkit. Exempting pass-through income substantially narrowed the tax base of that instrument, and in a haphazard and unpredictable way.