Kansas abandons massive tax cuts that provided model for Trump's plan

[American Fabius]

Kansas has rejected the years-long tax-cutting experiment that brought its governor, Sam Brownback, to international attention and provided a model for the Trump administration’s troubled tax plans.


In a warning shot to the Trump administration, even Brownback’s fellow Republicans voted to override his veto of a bill to reverse many of the tax cuts he championed as a way to spur entrepreneurs and the economy, but which have left the state with a $1bn hole in its budget.



Starting in 2012, Brownback’s plan has been to “march to zero” – cutting taxes wherever possible in the belief that the money Kansans saved would flow into the wider economy and drive growth. The governor was advised by Arthur Laffer, the economist who inspired Ronald Reagan’s “trickle-down” economic theory. So radical was his plan that critics called Kansas “Brownbackistan”.


State Democrats and local critics were delighted that Brownback’s plan had finally hit the rocks after earlier attempts to overrule the governor’s veto had failed. Senator Tom Holland, of Baldwin City, cheered the end of “Sam’s march-to-zero madness”.

Judith Deedy, a mother of three from Johnson County who has campaigned against the cuts she blames for an escalating crisis in the state’s school system, said she was “delighted” by the news. “It just didn’t work. This was a terrible experiment that has left our state unable to do what it is supposed to do,” she said.


Brownback’s defeat means the state will end a tax cut for limited liability companies (LLCs) and so-called pass-through businesses – which meant independent business owners and farmers would pay no state tax on the bulk, if not all, of their income. That tax plan is similar to the pillar of Trump’s tax proposal. After it was brought in, the number of LLCs in Kansas leapt from 190,000 to over 300,000 and tax revenues plummeted, but the rate of jobs growth in Kansas has lagged that of its neighbors.

https://www.theguardian.com/us-news/2017/jun/07/kansas-tax-cuts-sam-brownback-trump-plan


The conservative Republican governor still touts the income tax cuts enacted in 2012 and 2013 as pro-growth policies. But voters soured last year on the governor’s policies, ousting two dozen of his allies from the legislature and giving more power to Democrats and moderate Republicans who then backed this year’s tax increase. The legislature’s action leaves his main political legacy in tatters.

'We are a cautionary tale': Kansas feels the pain of massive Trump-style tax cuts
Read more

 

[American Fabius]

pretty funny how quiet the Dumb Donalds are on this post.

 

[atlkvb]

In a warning shot to the Trump administration, even Brownback’s fellow Republicans voted to override his veto of a bill to reverse many of the tax cuts he championed as a way to spur entrepreneurs and the economy, but which have left the state with a $1bn hole in its budget.

Liberal speak for "you didn't send us enough money to spend". Kansas taxpayers are still paying taxes, but the Left thinks they're not paying enough to fund all of the spending Big Government bureaucrats want to redistribute.

Here's an idea, start at a zero budget, and ask the taxpayers how much of their money should be spent on what actually needs to be done (not what some Leftists want to spend money on) THEN tax them to pay for that spending.

There won't be any "holes" in the budget, and Kansas taxpayers will get to keep most of what they earn instead of Leftists demanding it be turned over to them in the form of higher taxes for even more profligate spending.

 

[atlkvb]

10 Questions about the so called "failed" Kansas tax plan posted by American Fabius:

1) What is the total Kansas budget relative to it's revenues? The article never did say.(at least not the piece posted)

2) What is the proposed tax increase relative to the cuts that were being blamed for the deficit?

3) Did overall tax revenue increase or decrease under the Laffer plan? Essential to his curve is the assumption of increased revenues as taxes are cut. Did that happen here, if so what happened to those additional revenues? (again the article did not specify)

4) What spending was cut as revenues did not meet expenditures? Were increases still built into state budgets, or were adjustments made as revenues declined?

5) What effect did the relaxation of "pass through" taxes for business produce? Net new jobs and businesses or net loss? The article simply said the tax was ending because revenues were lost from it, but it did not indicate what the full impact of the tax reduction was on the overall Kansas business climate? For example new jobs meant new taxpayers, property taxes etc.

6) What new spending was proposed after these tax cuts went into effect? The article says State budget planners were not able to do what "was needed" but how much of that was simply proposed new spending?

7) What are the wishes of Kansas taxpayers? The article simply quoted Government bureaucrats who always want more of the taxpayer's money to spend, but what do most Kansas taxpayers think of the idea of eliminating these tax breaks? The article didn't poll them or quote them.

8) What were the out year projections for the State's coffers if current revenue streams remain in place? Was the 1 billion dollar shortfall mentioned in the article just for one year, or were these deficits annual expectations of revenue shortfalls? Were there any surpluses in other years?

9) Were any other taxes raised during the relaxation of these specific taxes? For instance were licenses & fees increased, land use rights, were there increases to the State's investments, property or other assets?

10) How much lower were Kansas' taxes relative to its regional neighbors? Higher, lower? Was its budget shortfall relative to other States of its population equal to, greater than, or less than their budgets?

It's a key in determining if Kansas' spending is either too much and therefore can be adjusted back to meet the lower than anticipated revenues, is about right relative to it's population base, or needs to be increased...in which case either targeted tax cuts or dedicated sources of new revenues could be utilized to close the anticipated budget shortfall rather than re-instituting a broad new massive tax increase on all citizens.

I know the OP won't (or can't) answer these questions because his only objective is to kill Trump's tax plan for the nation. But Liberals never get elected promising to increase spending and taxes...that's just what they always advocate (as in this case) once in they're in Office whether they already have enough money to spend or not.

 

[moe]

pretty funny how quiet the Dumb Donalds are on this post.

Repubs like the services that gov't provides but they just don't want to pay for them. Sad.

 

[moe]

10 Questions about the so called "failed" Kansas tax plan posted by American Fabius:

1) What is the total Kansas budget relative to it's revenues? The article never did say.(at least not the piece posted)

2) What is the proposed tax increase relative to the cuts that were being blamed for the deficit?

3) Did overall tax revenue increase or decrease under the Laffer plan? Essential to his curve is the assumption of increased revenues as taxes are cut. Did that happen here, if so what happened to those additional revenues? (again the article did not specify)

4) What spending was cut as revenues did not meet expenditures? Were increases still built into state budgets, or were adjustments made as revenues declined?

5) What effect did the relaxation of "pass through" taxes for business produce? Net new jobs and businesses or net loss? The article simply said the tax was ending because revenues were lost from it, but it did not indicate what the full impact of the tax reduction was on the overall Kansas business climate? For example new jobs meant new taxpayers, property taxes etc.

6) What new spending was proposed after these tax cuts went into effect? The article says State budget planners were not able to do what "was needed" but how much of that simply proposed new spending?

7) What are the wishes of Kansas taxpayers? The article simply quoted Government bureaucrats who always want more of the taxpayer's money to spend, but what do most Kansas taxpayers think of the idea of eliminating these tax breaks? The article didn't poll them or quote them.

8) What were the out year projections for the State's coffers if current revenue streams remain in place? Was the 1 billion dollar shortfall mentioned in the article just for one year, or were these deficits annual expectations of revenue shortfalls? Were there any surpluses in other years?

9) Were any other taxes raised during the relaxation of these specific taxes? For instance were licenses & fees increased, land use rights, were there increases to the State's investments, property or other assets?

10) How much lower were Kansas' taxes relative to its regional neighbors? Higher, lower? Was its budget shortfall relative to other States of its population equal to, greater than, or less than their budgets?

It's a key in determining if Kansas' spending is either too much and therefore can be adjusted back to meet the lower than anticipated revenues, is about right relative to it's population base, or needs to be increased...in which case either targeted tax cuts or dedicated sources of new revenues could be utilized to close the anticipated budget shortfall rather than re-instituting a broad new massive tax increase on all citizens.

I know the OP won't (or can't) answer these questions because his only objective is to kill Trump's tax plan for the nation. But Liberals never get elected promising to increase spending and taxes...that's just what they always advocate (as in this case) once in they're in Office whether they already have enough money to spend or not.

Google is your friend.

 

[atlkvb]

Google is your friend.

Tried that, still couldn't get good answers to all of my questions but I really wanted the OP to answer them.

He's not banned from using it either.

 

[atlkvb]

Repubs like the services that gov't provides but they just don't want to pay for them. Sad.

No we just prefer the private sector where services are truly needed, and in most cases we just prefer providing our own services minus Leviathan.

 

[moe]

No we just prefer the private sector where services are truly needed, and in most cases we just prefer providing our own services minus Leviathan.

lol

 

[atlkvb]

lol

lol.

So tell me Mr. Moe, how much "extra" do you send in?

Do you itemize your 1040?

Claim any deductions?

Accept your "refund", or do you "volunteer" to help out your fellow struggling Americans with your "fair share" of excess refunded tax payments by giving it over to Uncle Sam to redistribute?

How can you keep that huge refund for yourself when so many of your fellow citizens are thirsty, hungry, homeless and without Health care Insurance?

Don't you already have enough?

Aren't you being "greedy" demanding to keep more of what you've earned?

 

[moe]

lol.

So tell me Mr. Moe, how much "extra" do you send in?

Do you itemize your 1040?

Claim any deductions?

Accept your "refund", or do you "volunteer" to help out your fellow struggling Americans with your "fair share" of excess refunded tax payments by giving it over to Uncle Sam to redistribute?

How can you keep that huge refund for yourself when so many of your fellow citizens are thirsty, hungry, homeless and without Health care Insurance?

Don't you already have enough?

Aren't you being "greedy" demanding to keep more of what you've earned?

I pay Fed and state every year.

 

[atlkvb]

I pay Fed and state every year.

That wasn't my question to you moe. I know you pay, we all do.

I asked what you do with your "excess"?

That's what the Left bitches all the time about the so called "rich"...that they already have enough and are simply being "greedy" demanding to keep more of whatever they've earned.

Now I'm not sure what your total income is, but according to the Left if you make more than someone who is poor, you are indeed "rich" and don't "need" what you have so you should turn your excess over to them (Leftists) to give to the poor and if you don't you're a hateful selfish greedy rich snob!

Are you Moe?

 

[moe]

That wasn't my question to you moe. I know you pay, we all do.

I asked what you do with your "excess"?

That's what the Left bitches all the time about the so called "rich"...that they already have enough and are simply being "greedy" demanding to keep more of whatever they've earned.

Now I'm not sure what your total income is, but according to the Left if you make more than someone who is poor, you are indeed "rich" and don't "need" what you have so you should turn your excess over to them (Leftists) to give to the poor and if you don't you're a hateful selfish rich snob!

Are you Moe?

Simply fascinating discussion but Kansas lawmakers were fools (with a $1B deficit now) and Trump seems to want to use their plan as a model, not good. Hopefully saner minds will prevail in DC.

 

[atlkvb]

Simply fascinating discussion but Kansas lawmakers were fools (with a $1B deficit now) and Trump seems to want to use their plan as a model, not good. Hopefully saner minds will prevail in DC.

I don't think the plan was bad, maybe their execution and administration of whatever revenue streams they did have was poor I'm not sure (thus my questions)

In general, tax cuts are not bad as long as spending is adjusted to reflect the changes in revenues.

In many cases, the additional revenues generated get spent beyond the amount that comes in so the point defeats itself.

That happened all through the 80's. Reagan's tax cuts generated huge new revenues, Congress spent every penny and then some.