Kansas lawmakers jump-start debate over repealing tax break[W:262]

Eric7216 said:

I am always amazed at the vitriol directed at Kansas in general and Brownback in specific. I don't get it. Thomas Frank wrote a book, What's Wrong with Kansas that attempted to explain problems at the time under Dem Governor Sibelius. I read it and did not see the problem. And now this budget issue. $342 million is less than 2% of Kansas government revenues. Currently Kansas has one of the lowest debt to revenue ratios of 37% so a slight increase won't kill them. Some states have debt to revenues ratios of more than 75%. The average for states is 51%. The federal budget operates with deficits c. 10% of revenues.

On the personal side, Kansas has average income per capita but less than average cost of living. It is better to make the average of $52K/yr in Kansas's .92 Cost of Living than to make Connecticut's $70K/yr in a 1.45 cost of living state. Adjusting for cost of living, Kansas's $56,521/yr is better than Conn's $48,505. Kansas also has better income equality than most other states. I would not want to live in Kansas for other factors but economically they seem to be doing rather well.

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Eric7216 said:

I am always amazed at the vitriol directed at Kansas in general and Brownback in specific. I don't get it. Thomas Frank wrote a book, What's Wrong with Kansas

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joG said:

It was an experiment. That it was "the" experiment is less true. As I pointed out more than once here, you would have to look at the details that nobody here seems to supply and I am not enough interested in this case to look up.

At this point the Kansas experience might be good propaganda. As it is being used, it has little informational value.

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Since it took effect in January 2013, total employment in Kansas has risen only 2.6 percent, compared to 6.5 percent nationally. Private sector employment in Kansas has risen 3.5 percent, compared to 7.6 percent nationally.

The state’s economy has grown less than half as fast as the national economy; Kansas’ gross domestic product (GDP) grew 4.8 percent from the end of 2012 through the first quarter of 2016, while national GDP rose 11.9 percent.

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Absentglare said:

$342 million is less than 2% of Kansas government revenue?

Can you cite this number?

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Incisor said:

Yes. Not only did they cut spending, but they raided the Highway Fund and Welfare Block Grant.

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Incisor said:

Obviously, everyone saw this coming. Sad thing is that Brownback is one of the many trickle-down supporters who is advising Trump. If he wants to do for the rest of the country what was done in Kansas, we're in big trouble.

From the AP by way of the Miami Herald:

Kansas lawmakers jump-start debate over repealing tax break

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joG said:

With the level of information at hand, it is hard to say,what went wrong. But there is a plethora of empirical studies and research that show pretty clearly that tax reduction helps the economy much better than expanded spending.

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Incisor said:

Your second point seems like a cop-out, cut-and-run to me. You wouldn't believe me if I said I was Tom Brady, so why should I believe you when you make claims about yourself?

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JC Callender said:

$343 million doesn't seem that bad, esp. when you consider that California is expecting a $1.6 billion deficit. :shock:
Gov. Jerry Brown predicts a $1.6-billion deficit as he unveils state budget - LA Times

Plus, unemployment in Kansas is 4.3%...pretty low folks. So, maybe you should concentrate a little on the inner cities. Would you like some of their deficit stats?

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Kushinator said:

Where is one empirical study, much less this plethora you claim? You had an opportunity to properly source this statement prior to hitting the post button, yet you chose not to do so.

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JasperL said:

What we know is he slashed personal income taxes by lowering rates and by exempting from tax all income from sole proprietorships, LLCs, S Corps, and partnerships. Here's a primer: Not in Kansas Anymore: Income Taxes on Pass-Through Businesses Eliminated | Tax Foundation

The idea was by ELIMINATING income tax on all businesses except C corps that it would unleash an economic boom, employment growth, etc. and that didn't happen. For example, from January 2009, the national jobs growth rate was about 10.2%, and in Kansas 1.9%, total new jobs 20,900.

Over the past year, Kansas has actually LOST about 20,000 jobs.

More here: Kansas? Tax Cut Experience Refutes Economic Growth Predictions of Trump Tax Advisors | Center on Budget and Policy Priorities



What the experiment provides a lot of evidence for is the idea that taxes play a pretty minor role in economic growth. The promised growth from taking income taxes to zero on every small business just didn't happen, and in the meantime they've liquidated nearly 700 million of reserves, and put off a lot of infrastructure maintenance, several one time gimmicks etc. and are still waiting on the promised Laffer Curve tax Santa Clause to show up and he ain't coming.

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JasperL said:

LOL, comparing mice to elephants I see.

Total revenue for CA - roughly 120B. For Kansas - 6B, or 1/20th the size.

Apples to apples, using the CA budget as the proper scale - $343 x 20 = 6.9B "Kansas" deficit, versus $1.6B for CA. Or going the other way, using the Kansas budget as the scale, CA budget deficit is roughly 83 million, versus the KS deficit of $343M.

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Incisor said:

LOL! It took 4 years for revenue to reach the level it was prior to the tax cuts. And even then, they're still running a massive deficit.




Not only did Kansas cut spending, but they raided the Highway Fund to close the deficits created by the dumb tax cuts.

Furthermore, the "adrenaline" Brownback promised the tax cuts would bring to the economy never materialized.

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jonny5 said:

And yet, they have more taxes than ever before.

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Furthermore, the lower taxes in the initial years were primarily due to federal tax changes influencing the higher income Kansans that the state taxes most.

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JC Callender said:

Ok, mice to elephants, gotcha. Well then how about this example: The city of Detroit which has been run by Democrats since the 60's and was a model city for the War on Poverty filed for bankruptcy in 2013 owing $18-20 billion. The Detroit Public Schools deficit in 2015 alone was $1.7 billion.

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Incisor said:

Well, of course they would...everyone has. The point is that the revenue was reduced and there was no compensatory increase in economic activity, as we were promised there would be. So saying "well, there's more revenue now than there was before the tax cuts", is a bit disingenuous because revenue grows every year anyway. What Kansas did was take 3 steps back in order to move one step forward. Revenue for Kansas in 2012 was higher than revenue for 2013, 2014, and 2015. So it took three years to get revenue back to what it was before the cut. And what do they have to show for it? A loss of 20,000 jobs in the last 12 months alone, GDP growth below the national average, job growth below the national average, 49th in wages, and a massive deficit.




Kansas' state income taxes have nothing to do with federal income taxes.

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The large increase in payments accompanying people’s income tax returns probably reflects the fact that higher-income taxpayers, anticipating changes in tax law, realized more income in 2012.

Read more: CBO Disproves Paul Davis?s Talking Points on Kansas Revenue Numbers | Americans for Tax Reform
Follow us: @taxreformer on Twitter

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jonny5 said:

But the point is youre trying to prove Kansas has a tax problem, when they have higher taxes than ever before.

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Their real problem is spending too much.

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jonny5 said:

Yes they do. When the federal govt changes tax policy, it affects how individuals in states income, which is what states like Kansas tax. Since they rely heavily on high income earners who can adjust their incomes to take advantage of taxes, in this case it drove them to move their income to a year earlier to reduce cap gains tax.

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JC Callender said:

Ok, mice to elephants, gotcha. Well then how about this example: The city of Detroit which has been run by Democrats since the 60's and was a model city for the War on Poverty filed for bankruptcy in 2013 owing $18-20 billion. The Detroit Public Schools deficit in 2015 alone was $1.7 billion.

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Incisor said:

They don't have higher taxes than ever before, and you keep trying to conflate federal income tax with state tax.




Kansas has cut spending in the state so much, that they had to close schools early because there wasn't enough money to keep them open.

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jonny5 said:

I already posted the proof, from their revenue report. I can see we arent going to get anyway, so dont move to Kansas I guess.

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Incisor said:

Oh also, the book is called What's the matter with Kansas? and it was about how Kansas' populism gave way to Conservative ideology leading voters to vote against their own best interests by making social issues like gay marriage and abortion the dominant issues in the elections and how Sebellius won because she stayed away from those issues, choosing instead to focus on economic issues. She won overwhelmingly. Did you even read the book???

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Eric7216 said:

You must mean Sebelius, not Sebellius.

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Several years ago I did a spreadsheet looking at all the states with their per capita income, cost of living, and income equality. Kansas ranked 4th in the country in income affordability, or their income divided by the cost of living. 24 states have higher per capita income but have higher cost of living. Throw in the income equality issue, where Kansas ranks 20th I concluded that if economics were important to me and I was average, Kansas would be a good place to live. Kansas also ranks high in low government debt and low per capita debt.

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The book talked about all those social issues but when social issues don't seem to result in negative economic impact for the citizens then I don't see the problem. Frank did not, in my mind, convince me that the social issues had any significant impact on the average Kansan. I don't recall anything about Sebelius winning because she stayed away from those issues.
You may be right about growth rates. Apparently they have dropped since Kansas ranked 23rd in growth in 2013, the year after the tax cuts. FWIW, Kansas ranks 20th in education, according to the NAEP.

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jonny5 said:

And yet, they have more taxes than ever before. At lower rates. Spending too much is the problem, as always. Furthermore, the lower taxes in the initial years were primarily due to federal tax changes influencing the higher income Kansans that the state taxes most. Those people shifted their income into 2012 to take advantage of the lower cap gains rate, and thus took less income in 2013.

CBO Disproves Paul Davis?s Talking Points on Kansas Revenue Numbers | Americans for Tax Reform

So you have lower tax rates, plenty of revenue, and economic growth. That's success. If anything they need to simplify and cut MORE. As well as spending their taxes better.

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Absentglare said:

$342 million is less than 2% of Kansas government revenue?

Can you cite this number?

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