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 ...
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.
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.
It was called the Laffer Curve. Not the Laffer Line
Your statement suggests a Line
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.
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.
In a normal world yes, but we have seen Republicans get tax cuts and continue spending like dimwits do.
There are probably thousands of articles about the Kansas predicament that can be found doing a google search.
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...
“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.
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
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.
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.
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.
OK, if the citizens of Kansas are happy with Brownback, why is his approval rating at 33%?
See here:
In fact, according to the PPP poll, he is TRAILING in his bid for reelection.
OK, if the citizens of Kansas are happy with Brownback, why is his approval rating at 33%?
See here:
In fact, according to the PPP poll, he is TRAILING in his bid for reelection.
IMHO, government should run balanced at 0 surplus/loss. The rest of the money should be returned to the taxpayer.
Kansas voted in Kathleen Kevorkian Sebelius as gov once upon a time, right?
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.
Ezra Klein’s website? The one that had that nasty spotlight shone on it for accusing Israel of war crimes?
“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.
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