Supply-side experiment a loser for Kansas

Every year, right after the April 15 tax deadline, the U.S. Census releases its data on the prior year’s state tax collections. It is a fascinating document, filled with great data points for tax and policy wonks. It reveals a good deal about the state of local economies, economic trends and results of specific policies. In broad terms, the financial fortunes of the states are improving…

There are some truly fascinating data points in the report…

Let’s focus on Kansas, because of all the states its tax data reflects conscious policy choices as opposed to larger economic forces, such as falling oil prices.

Kansas had a big decline in revenue, falling 3.8 percent, from $7.6 billion to $7.3 billion. (Delaware had a 5.1 percent decline, second to Alaska in percentage terms, on revenue of just $100 million.)

Under the leadership of Gov. Sam Brownback, R, the state radically cut income taxes on corporations and individuals. Going on the assumption that this would generate a burst of economic growth and higher tax revenue, no alternative sources of revenue were put into place. Similarly, the state failed to lower spending.

Alas, reality trumps theory. As we have seen almost every time this thesis has been put into practice, it fails. The tax cuts don’t magically kick the economy into higher gear and the government ends up short of money. Remember former President George W. Bush and his tax cuts? Same deal.

To read the entire article, click here.

 

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