Kansas was supposed to be the GOP’s tax-cut paradise. Now it can barely pay its bills.

[dismal]

I'm p sure keynes advocated cutting taxes and increasing spending during downtimes not cutting taxes and cutting spending during downtimes.

He was big on deficits. In the OP there is a nice chart showing they did some good work there in eliminating those surpluses, so presumably their economy is that much the better for it. A Keynesian would say.

 

[Jason Harvestdancer]

Total Taxation = Total Spending

Only a conservative can think that by cutting direct taxes without corresponding spending cuts would work. If you want to cut taxes - really cut taxes - spending has to go down too.

It should be noted that some taxes that are spent by Government help generate additional revenue, so if you cut some taxes and spending evenly, that doesn't mean you break back even.

I need to be convinced of that.

 

[Cheerful Charlie]

http://www.vox.com/2014/7/8/5868717/sam-brownback-kansas-tax-cut

In 2012, Kansas governor Sam Brownback signed a massive tax cut into law, arguing that it would boost the state's economy. Eventually, he hoped to eliminate individual income taxes entirely. "Our place, Kansas, will show the path, the difficult path, for America to go in these troubled times," he said.

National conservative activists raved. Patrick Gleason of Americans for Tax Reform said Kansas was "the story of the next decade." The Cato Institute praised Brownback's "impressive" tax cuts and gave him an "A" on fiscal policy. And the Weekly Standard's Bill Kristol said that, if reelected, Brownback would be "a formidable presidential possibility."

Yet though Brownback is running for reelection this fall in a deep red state, he's trailed his Democratic challenger in 3 of the 4 most recent polls — and his marquee tax cut appears to be the main reason. Kansas is now hundreds of millions of dollars short in revenue collection, its job growth has lagged the rest of the nation, and Moody's has cut the state's bond rating. "Governor Brownback came in here with an agenda to reduce the size of government, reduce taxes, and create a great economic boom," says University of Kansas professor Burdett Loomis. "Now there's been a dramatic decline in revenues, no great increase in economic activity, and we've got red ink until the cows come home."

I am shocked that tax cuts didn't spur growth and send KS revenue through the roof. </sarc>

What happened to the supply side argument that tax cuts spur growth and increase tax revenues?

The bad news is, ALEC is peddling these sort of massive Reaganomics style tax cuts. And Arthur Laffer resurfaced to advise Brownback, who simply can't understand 20+ years of Supply Side failure. Obviously, conservatism causes brain damage. As Wiley Coyote says, "Genius! Pure Genius!"

 

[Loren Pechtel]

What happened to the supply side argument that tax cuts spur growth and increase tax revenues?

They do eventually. Look at Reagan. He cut taxes and then... the Clinton Boom!

Actually Reagan didn't cut taxes.

While the top rate went way down he also closed an awful lot of loopholes and the like. (It really clobbered commercial real estate because prices were bid up due to transactions whose benefit was tax writeoffs. Those went away, prices adjusted.) The total tax take was about the same.

 

[SimpleDon]

I'm p sure keynes advocated cutting taxes and increasing spending during downtimes not cutting taxes and cutting spending during downtimes.

He was big on deficits. In the OP there is a nice chart showing they did some good work there in eliminating those surpluses, so presumably their economy is that much the better for it. A Keynesian would say.

Keynes wouldn't advocate for a local government like a state to deficit spend.

Kansas is not deficit spending anyway, they are paying their bills with a combination of tax revenues and savings, surpluses from previous year.

Kansas can not by law deficit spend, they must balance their budget every year.

The economics that failed was that of Laffer, quoted in the article as having predicted that the lowered tax rates would generate enough new economic growth that total tax revenues would go up.

Laffer's theories are the ones that failed and gave us so many huge federal budget deficits after the supply side tax rate cuts of the 1980's and 2000's failed to produce enough economic growth to replace the revenue lost.

 

[SimpleDon]

They do eventually. Look at Reagan. He cut taxes and then... the Clinton Boom!

Actually Reagan didn't cut taxes.

While the top rate went way down he also closed an awful lot of loopholes and the like. (It really clobbered commercial real estate because prices were bid up due to transactions whose benefit was tax writeoffs. Those went away, prices adjusted.) The total tax take was about the same.

Can you supply some citations for this claim? The top income tax rate was cut from ~70% to 27%, under Reagan. If anything corporate tax loopholes increased.

 

[Loren Pechtel]

Laffer's theories are the ones that failed and gave us so many huge federal budget deficits after the supply side tax rate cuts of the 1980's and 2000's failed to produce enough economic growth to replace the revenue lost.

His graph is basically true. The problem is the assumption that we are to the right of the peak--that's never been supported.

 

[ksen]

no, his graph is crap

 

[dismal]

He was big on deficits. In the OP there is a nice chart showing they did some good work there in eliminating those surpluses, so presumably their economy is that much the better for it. A Keynesian would say.

Keynes wouldn't advocate for a local government like a state to deficit spend.

Really? How do the economy know?

Why wouldn't state deficits (in this case reduction of surpluses) just add to teh awesome?

 

[Nice Squirrel]

Oh in that case: You did not beat your wife correctly. Nor rape your neighbor.

You are a heretic to my perception of what you should be. Don't try to describe actual events outside of my preconceived expectations, stick to the script.

I was actually pointing out that your economic prescriptions are quite different than Keynes.

No you weren't. You were trying to bait me. No where did I mention anything that could be described as Keynesian.

I do not necessarily agree with Keynes myself, but I am generally among the few.

I do not care what you think.

I find it nice to see all the pro-Keynesians that have converted to being bashers of Ohio's Keynesian approach.

Are you talking to me? Because I find it nice to see all the wife-beating sheep-rapists that have responded to my posts. Oh, you never said anything about hobbies? Doesn't matter, I'll just keep bringing them up like a broken record. Want evidence? Well why don't you provide the evidence? I mean I recall something about wife beating and man-sheep love, but I can't be bothered to look it up or provide hard evidence, because I am a troll and not a very good one.

 

[Nice Squirrel]

It should be noted that some taxes that are spent by Government help generate additional revenue, so if you cut some taxes and spending evenly, that doesn't mean you break back even.

I need to be convinced of that.

May I present you with the NIH and NSF.

 

[Jimmy Higgins]

They do eventually. Look at Reagan. He cut taxes and then... the Clinton Boom!

Actually Reagan didn't cut taxes.

While the top rate went way down he also closed an awful lot of loopholes and the like. (It really clobbered commercial real estate because prices were bid up due to transactions whose benefit was tax writeoffs. Those went away, prices adjusted.) The total tax take was about the same.

Interesting. Is this why annual revenues under Carter increased an average of nearly 15%, while under Reagan it was half of that?

 

[Nice Squirrel]

Actually Reagan didn't cut taxes.

While the top rate went way down he also closed an awful lot of loopholes and the like. (It really clobbered commercial real estate because prices were bid up due to transactions whose benefit was tax writeoffs. Those went away, prices adjusted.) The total tax take was about the same.

Interesting. Is this why annual revenues under Carter increased an average of nearly 15%, while under Reagan it was half of that?

Actually, Reagan raised taxes on nearly everyone except, wait for it....


The rich. He presided over the greatest tax hike in US history.

 

[Cheerful Charlie]

The fun part of Brownback's 'plan' is that it does not fully kick in until 2018. Unless cooler heads prevail and kill it. It has been estimated that deficits will soar to $900 billions. I almost wish Kansas will do this so they can get idiotnomics out of their system for once and for all. Apparently the far right in Missouri wants to emulate Kansas. Its sort of like Marxist communism. Bad economic ideas have to reach the total catastrophe level to finally die off. I guess Kansas is as good a place for this to happen as anyplace else

 

[Jason Harvestdancer]

I need to be convinced of that.

May I present you with the NIH and NSF.

Yes, and...?

 

[T.G.G. Moogly]

Total Taxation = Total Spending

Only a conservative can think that by cutting direct taxes without corresponding spending cuts would work. If you want to cut taxes - really cut taxes - spending has to go down too.

Conservatives do not understand that when you get right down to it and eliminate all the voodoo, spending and taxing are the same thing.

 

[Cheerful Charlie]

Total Taxation = Total Spending

Only a conservative can think that by cutting direct taxes without corresponding spending cuts would work. If you want to cut taxes - really cut taxes - spending has to go down too.

Conservatives do not understand that when you get right down to it and eliminate all the voodoo, spending and taxing are the same thing.

Kansas has already deeply slashed education spending and will have to enact further draconian cuts if Brownback and the ultraconservatives get their way. Education is 60% of their budget. Or run massive deficits What else is there to cut? Safety net, law enforcement, infrastructural spending? Many states do mandate balanced budgets, big tax cuts mandate slashing spending as Laffer's ideas don't work as promised.Browback's Big Plan only produced 57% of the income he had predicted it would. Brownback wants to stay the course.

 

[T.G.G. Moogly]

Kansas has already deeply slashed education spending and will have to enact further draconian cuts if Brownback and the ultraconservatives get their way. Education is 60% of their budget. Or run massive deficits What else is there to cut? Safety net, law enforcement, infrastructural spending? Many states do mandate balanced budgets, big tax cuts mandate slashing spending as Laffer's ideas don't work as promised.Browback's Big Plan only produced 57% of the income he had predicted it would. Brownback wants to stay the course.

Well that must mean that Brownback and kin have already absorbed a 60% reduction in their salaries and personal expenses that they receive at government expense.

I used to think it ironic that these folks want to cut everything that doesn't have anything to do with their personal agendas but have the public continue to fund and expand their personal agendas. I don't think it ironic anymore. It's just impossible to have so many cases of irony as we see among ultraconservatives.

 

[Nice Squirrel]

May I present you with the NIH and NSF.

Yes, and...?

They create additional revenue.

 

[Cheerful Charlie]

Well that must mean that Brownback and kin have already absorbed a 60% reduction in their salaries and personal expenses that they receive at government expense.

I used to think it ironic that these folks want to cut everything that doesn't have anything to do with their personal agendas but have the public continue to fund and expand their personal agendas. I don't think it ironic anymore. It's just impossible to have so many cases of irony as we see among ultraconservatives.

Brownback is running for re-election in 2014. His favorability is polling at 33% and dropping. There is a real possibility he may not have a job after that.