Voodoo Economics in the Sunflower State
Kansas Republicans pushed through a series of massive tax cuts. As always, they were justified as a free lunch — economic growth would be so explosive that revenues would actually rise! How did that work out?
Instead, job growth in Kansas trails the nation. The state’s rainy-day fund is dwindling to zero. Month after month, revenue comes in even lower than fiscal officials’ most dire expectations.
In the rest of the country, school budgets are finally beginning to recover from the toll of the last recession; in Kansas, they’re still falling. Healthcare, assistance for the poor, courts, and other state services are being eviscerated.
But they have more great ideas!
More tax changes were enacted last year. The top rate was cut to 3.9% in stages through 2018. But other cuts were reversed; much of a sales tax reduction was canceled, and the standard deduction was cut back, effectively raising taxes for the middle- and working-class.
In all, as the CBPP documents, the changes will cut the taxes of the wealthiest 1% of Kansans by 2.2%. The poorest 20% of Kansans will see their taxes rise by 1.3%.
The impact on overall state revenue has been devastating. Despite Laffer’s prediction, the state ended fiscal 2014 with a shortfall of $338 million.
In conclusion, upper-class tax cuts cannot fail — they can only be failed.