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Kansas was supposed to be the GOPís tax-cut paradise. Now it can barely pay its bills.
VOX ^ | 07/08/2014 | Andrew Prokop

Posted on 07/08/2014 11:31:07 AM PDT by SeekAndFind

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."

(Excerpt) Read more at vox.com ...


TOPICS: Business/Economy; Government; News/Current Events; US: Kansas
KEYWORDS: kansas; sambrownback; spending; taxcuts

1 posted on 07/08/2014 11:31:07 AM PDT by SeekAndFind
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To: SeekAndFind

Yeah, he forgot that when you cut taxes you have to trim the budget too. Cannot keep spending when your income goes down. Stupid.


2 posted on 07/08/2014 11:33:18 AM PDT by Resolute Conservative
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To: SeekAndFind

Don’t worry... we still have Detroit and Flint is “hotting up” according to latest headlines.


3 posted on 07/08/2014 11:33:46 AM PDT by Lake Living
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To: Resolute Conservative

I was getting ready to ask if they kept spending the same...


4 posted on 07/08/2014 11:34:00 AM PDT by CommieCutter ("For an idea to be too simplistic, it must first be proven wrong" --Thomas Sowell)
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To: SeekAndFind

All your money are belong to us


5 posted on 07/08/2014 11:35:01 AM PDT by Organic Panic
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To: Resolute Conservative

Wasn’t it Arthur Laffer who argued that increased economic growth due to tax cuts would deliver more revenue that would help cushion the impact of reduced revenue collection?


6 posted on 07/08/2014 11:35:18 AM PDT by SeekAndFind
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To: SeekAndFind

I don’t see any deficits.


7 posted on 07/08/2014 11:36:21 AM PDT by SoCal Pubbie
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To: SeekAndFind

whats actual tax revenue. the surplus information don’t prove or disprove tax cut is the cause of the bankruptcy. It could be overspending


8 posted on 07/08/2014 11:37:37 AM PDT by 4rcane
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To: SoCal Pubbie

I think they’re PROJECTING deficits by looking at the trend.


9 posted on 07/08/2014 11:37:54 AM PDT by SeekAndFind
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To: SoCal Pubbie

Same here; I still see a surplus. What’s the problem? How can they not “pay their bills” and still have a surplus?


10 posted on 07/08/2014 11:38:00 AM PDT by Doctor 2Brains
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To: SeekAndFind

Cheerleading from liberal groups like Amer for Tax Reform (pro Amnesty, pro Islamic Terrorist), CATO (Amnesty Liberal, Open Borders Liberal, One World Liberal), and Bill Kristol (all liberal)....doesn’t help the Conservative pedigree

Surprised Chamber of Communists hasn’t chimed in


11 posted on 07/08/2014 11:38:49 AM PDT by DisorderOnBorder (Haley Barbour rather work for drug cartels than Americans)
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To: SeekAndFind

So, the budget surplus is declining, but still there.....

Why exactly is that a bad thing...the more excess revenue, the more wasteful spending.

If the government is taking in more than it’s spending, it should not only cut taxes to trim the surplus for the next year, it should rebate the excess to prevent its’ waste.

And yes...merely voicing that point of view makes me an extremist.


12 posted on 07/08/2014 11:39:30 AM PDT by rottndog ('Live Free Or Die' Ain't just words on a bumber sticker...or a tagline.)
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To: SeekAndFind

I second what others have said. A true conservative cuts spending in addition to taxes. If he cut taxes and kept spending like a George Bush-type Compassionate Conservative, then he is a failure.


13 posted on 07/08/2014 11:40:16 AM PDT by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
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To: SeekAndFind
Wasn’t it Arthur Laffer who argued that increased economic growth due to tax cuts would deliver more revenue that would help cushion the impact of reduced revenue collection?

He said it would in certain circumstances, in certain amounts - that's why his theory on this is called "the Laffer Curve" - perhaps Kansas over shot, or perhaps there are other things to consider…..spending, etc...

14 posted on 07/08/2014 11:40:32 AM PDT by C. Edmund Wright (www.FireKarlRove.com NOW)
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To: Resolute Conservative

Why should any State run a surplus? If a State does run a surplus, invest the money and reinvest the gain. Save the money and interest proceeds for a downturn. Don’t spend the principle. That’s what real people do.


15 posted on 07/08/2014 11:41:17 AM PDT by DariusBane (Liberty and Risk. Flip sides of the same coin. So how much risk will YOU accept? Vive Deco et Vives)
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To: Resolute Conservative

Doesn’t the legislature that cut the taxes also control the spending?


16 posted on 07/08/2014 11:45:35 AM PDT by Blood of Tyrants (Haven't you lost enough freedoms? Support an end to the WOD now.)
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To: rottndog

Very few governments will rebate overtaxed citizens, preferring instead to spend the money on pet projects.


17 posted on 07/08/2014 11:48:09 AM PDT by Blood of Tyrants (Haven't you lost enough freedoms? Support an end to the WOD now.)
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To: SeekAndFind

Government spending should be a break even process, with revenue from taxes and fees matching outgoing expenses, just like everybody who has to balance a checkbook. Allow a small surplus to cover for contingencies, otherwise I see no reason to run a huge surplus (i.e. your tax dollars being tied up by the government).


18 posted on 07/08/2014 11:48:22 AM PDT by factoryrat (We are the producers, the creators. Grow it, mine it, build it.)
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To: SeekAndFind

One thing that needs to be pointed out is the huge amount of capital gains were realized in 2012 before the law changed and the tax went up. They knew it would result in lower revenue in subsequent years.


19 posted on 07/08/2014 11:49:20 AM PDT by mfreddy
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To: SeekAndFind

Nationally that’s what happened in the early 2000s. The revenue increased with lower taxes. But they kept spending more while keeping it under 20% of GDP.


20 posted on 07/08/2014 11:49:27 AM PDT by CommieCutter ("For an idea to be too simplistic, it must first be proven wrong" --Thomas Sowell)
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To: SeekAndFind

Off that 1.5 billion surplus at 4% interest that’s 60 millions a year. Keep rolling in the money until you need some to balance a budget. Don’t spend the principle.


21 posted on 07/08/2014 11:49:57 AM PDT by DariusBane (Liberty and Risk. Flip sides of the same coin. So how much risk will YOU accept? Vive Deco et Vives)
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To: DariusBane

So, I guess liberals are now: surpluses as far as the eye can see??

These are the same people that have been saying we need more deficits and debt to “dig” out of a hole.

I can’t even keep up with the flip flopping anymore.


22 posted on 07/08/2014 11:53:32 AM PDT by CommieCutter ("For an idea to be too simplistic, it must first be proven wrong" --Thomas Sowell)
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To: SeekAndFind

It was called the Laffer Curve. Not the Laffer Line
Your statement suggests a Line


23 posted on 07/08/2014 11:55:58 AM PDT by Rock Eye Jack
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To: Doctor 2Brains
Same here; I still see a surplus. What’s the problem? How can they not “pay their bills” and still have a surplus?

We don't allow the Government in Kansas to run a deficit. If they run out of money they have to cut spending. They have to pay their bills. So they will cut spending enough to barely pay their bills.

24 posted on 07/08/2014 11:58:32 AM PDT by Starstruck (If my reply offends, you probably don't understand sarcasm or criticism...or do.)
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To: SeekAndFind

If you look closely at the article, it mentions the tax cuts bill signed in 2012. The data to date can only reflect 2013 actual tax revenues because that is the last year for which tax returns have been recorded (only 2-3 months since filing). Therefore, this story is largely based on projections/estimates. As for the professor who claims “red ink as far as you can see”, he can’t see very far, can he!

This story is a political hit piece. It is based, at best, on one actual data point (2013 returns). It isn’t even worth reading. If you want to know the real story about tax cuts and spending in KS, you have to look at details regarding where the revenue is coming from and current economic activity, then understand that tax cuts (Laffer curve effect) have a lagged effect. You must know the lag.

Remove the estimated/projected data (2014 and 2015). Now, what does the bar graph data look like?

Don’t be fooled by a propagandist who hopes you aren’t smart enough to look at the numbers.


25 posted on 07/08/2014 12:03:16 PM PDT by iacovatx (Conservatism is the political center--it is not "right" of center)
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To: Blood of Tyrants

In a normal world yes, but we have seen Republicans get tax cuts and continue spending like dimwits do.


26 posted on 07/08/2014 12:11:21 PM PDT by Resolute Conservative
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To: iacovatx
"This story is a political hit piece"

There are probably thousands of articles about the Kansas predicament that can be found doing a google search.

27 posted on 07/08/2014 12:15:03 PM PDT by Ben Ficklin
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To: CommieCutter

The “surplus” was due to people shifting their cap gains to an earlier year to avoid a fed tax increase.

And, of course, the general, country-wide economic situation MIGHT have something to do with decreased economic activity and therefore tax revenue...


28 posted on 07/08/2014 12:16:46 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: SeekAndFind

“Wasn’t it Arthur Laffer who argued that increased economic growth due to tax cuts would deliver more revenue that would help cushion the impact of reduced revenue collection?”

If you cut taxes and spending by say, 30%, you’ll increase economic growth by a few points. In the long run, that will lead to economic prosperity, but in the short run you’ll be taking in much less tax revenue.

If all you do is cut taxes a lot but don’t also cut spending, the economic growth from the tax cuts probably won’t be enough to make up the budget shortfall in the short run, so yeah you’ll have budget deficits. That doesn’t mean high taxes and big government make fiscal sense. Taxes and spending have to be cut at the same time to avoid short term deficits.


29 posted on 07/08/2014 12:23:45 PM PDT by arista
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To: SeekAndFind

I didn’t know the purpose was to accumulate “surplus”

I thought it was to cover only those essential, mandated services (you know, the basics like public safety, roads, quality education) and now to engage in profit-making


30 posted on 07/08/2014 12:25:05 PM PDT by A_Former_Democrat (Shame on Sam The Sham . . . Michael ScAM . . .$$$ grab all planned by this "handlers")
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To: SeekAndFind
Now there's been a dramatic decline in revenues

Good.

I've never understood the "cut taxes so the State gets bigger" argument.

The only reason to cut taxes is to shrink the State. If cutting taxes GROWS the State, I'm against it.

31 posted on 07/08/2014 12:25:40 PM PDT by Jim Noble (When strong, avoid them. Attack their weaknesses. Emerge to their surprise.)
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To: iacovatx

I havent read the article but I wouldn’t be surprised if the School Funding lawsuit the State lost is going to take a huge hit, I believe they have to repay the districts that were “short changed” and increase their funding per pupil.

I could be wrong though.


32 posted on 07/08/2014 12:27:40 PM PDT by aft_lizard
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To: SeekAndFind

I hear a giant sucking sound in my spot on the border with Missouri. It’s the sound of small businesses leaving Missouri to locate in Kansas where they will pay property taxes, sales taxes and employ more Kansans. There must be a lag during this shift when income tax receipts will drop and other forms of tax revenue have not caught up. Kansas may also need to adjust their consumption taxes to get things back in balance.

Texas and Florida do not have income taxes. That seems to have had a positive effect on their growth rates. Democrats will do their best to discredit what Brownback is doing and he is taking a risk, but this can be a big plus long term.


33 posted on 07/08/2014 12:28:41 PM PDT by centurion316
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To: centurion316

OK, if the citizens of Kansas are happy with Brownback, why is his approval rating at 33%?

See here:

http://www.publicpolicypolling.com/main/2014/02/brownback-extremely-unpopular-trails-for-reelection.html

In fact, according to the PPP poll, he is TRAILING in his bid for reelection.


34 posted on 07/08/2014 12:33:18 PM PDT by SeekAndFind
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To: Ben Ficklin; iacovatx

OK, if the citizens of Kansas are happy with Brownback, why is his approval rating at 33%?

See here:

http://www.publicpolicypolling.com/main/2014/02/brownback-extremely-unpopular-trails-for-reelection.html

In fact, according to the PPP poll, he is TRAILING in his bid for reelection.


35 posted on 07/08/2014 12:34:29 PM PDT by SeekAndFind
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To: All

IMHO, government should run balanced at 0 surplus/loss. The rest of the money should be returned to the taxpayer.


36 posted on 07/08/2014 12:35:10 PM PDT by mmichaels1970
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To: SeekAndFind

Kansas voted in Kathleen Kevorkian Sebelius as gov once upon a time, right?


37 posted on 07/08/2014 12:36:21 PM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
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To: SeekAndFind
In fact, according to the PPP poll,

Topeka, we have a problem. I'd like to see some poll data that's not from PPP. Certainly the liberal wing of the Republican Party who are quite strong in Kansas are not happy with Brownback. After all, they all voted for Kathleen Sebelius.

38 posted on 07/08/2014 12:45:29 PM PDT by centurion316
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To: SeekAndFind

Ezra Klein’s website? The one that had that nasty spotlight shone on it for accusing Israel of war crimes?


39 posted on 07/08/2014 1:04:16 PM PDT by Olog-hai
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To: SeekAndFind; All
Regarding Kansas's revenue issues, please consider the following. As mentioned in related threads, Justice John Marshall had officially clarified that Congress is prohibited from laying taxes in the name of state power issues, essentially any issue which Congress cannot justify under its constitutional Article I, Section 8-limited powers.
“Congress is not empowered to tax for those purposes which are within the exclusive province of the States.” —Justice John Marshall, Gibbons v. Ogden, 1824.

One troubling aspect of Kansas's strained revenues is the following. As a consequence of state lawmakers who probably don't know the limits of Congress's limited power to lay taxes any better the voters who elected them do, Kansas lawmakers don't understand the following. State revenues for "government" services continue to leave the state in the form of constitutionally indefensible federal taxes, compliments of Constitution-ignoring Congress and Oval Office.

In fact, practically the only federal service that most Kansas citizens should be dealing with on a near daily basis is the US Mail Service, authorized under the Constitution's Clause 7 of Section 8 of Article I. As for most other federal services, the joke is on low-information Kansas USA citizens imo.

40 posted on 07/08/2014 1:32:27 PM PDT by Amendment10
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To: Resolute Conservative

“In a normal world yes, but we have seen Republicans get tax cuts and continue spending like dimwits do.”

I remember the 8 years of George W. Bush well. Tax cuts then a spending orgy by a Republican Congress and President with record earmarks, big new social programs, and no vetoes.

Our new Republican Governor in NC has the same problem. He cut taxes but can’t cut the spending enough to offset the revenue loss. The progressives are having a field day.


41 posted on 07/08/2014 1:37:43 PM PDT by Soul of the South (Yesterday is gone. Today will be what we make of it.)
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To: DisorderOnBorder

“Cheerleading from liberal groups like Amer for Tax Reform - CATO (Amnesty Liberal, Open Borders Liberal, One World Liberal),”

You are WAY WACKY - CATO is a Libertarian Think Tank of the highest standing, moral fiber and has the finest minds that Ronny Reagen liked to listen to

Please go clean yourself up, you spilled too much crap all over yourself


42 posted on 07/08/2014 3:08:01 PM PDT by DanZ
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To: SeekAndFind

Sooo..... they still have a surplus?

Lets focus more on the motive. I don’t know if the article mentioned it. How is Kansas’s economy? Did the experiment work. Seemed like a safe gamble, lower taxes, see if the economy improves, still have a surplus.


43 posted on 07/08/2014 3:37:23 PM PDT by castlegreyskull
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To: castlegreyskull

It did enjoy a downer economy. Either this article is just a disguised attack on a GOP governor. So they have a downer economy with high taxes, and a downer economy with low taxes, both with a surplus.


44 posted on 07/08/2014 3:39:17 PM PDT by castlegreyskull
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