The Democrats’ Kansas Distraction

The Wall Street Journal ^ | Nov. 14, 2017 | Ron Eastes

[jonefab]

When House Republicans unveiled their plan for tax reform this month, Democrats offered a curious response. Rather than give their own proposal, they held a mock hearing—a show trial, really—on Kansas’ 2012 tax cuts. Democrats see my state as proof that supply-side economics doesn’t work and that the GOP’s national tax reform will lead to budget cuts and enormous deficits.

But the comparison is less a cautionary tale than a tall tale. I was Kansas’ state treasurer from 2011-17, and no one watched the dollars flowing in and out more closely than I did. Consider a few facts:

First, the 2012 tax cuts came during the same year that federal stimulus funds ended. That alone resulted in a 12.5% drop in revenue. In the spring of 2010, then-Gov. Mark Parkinson, a Democrat, had worked with the Legislature to pass a 2011 budget that included $527.6 million in stimulus funds. Democrats knew this money was temporary but behaved as if it were permanent. The effect was to exaggerate the “lost revenue” from the tax cut.

Second, the shortfall was made worse because state lawmakers rejected the “pay-fors” proposed by Republican Gov. Sam Brownback. The governor’s original tax plan would have closed many loopholes. But the Legislature wanted to keep the tax credits and deductions and left them in the final bill. Such carve-outs should be viewed as spending through the tax code, as Martin Feldstein, a top adviser to President Reagan, has argued on these pages.

Third, the Legislature then continued to increase spending by 3% a year.

[Pining_4_TX]

Exactly, and they will do it again. The Democrats are either more clever than the Republicans, or most Republicans are just posturing and have no intention of shrinking government.