For those of you who haven’t been following this — and really, why would you unless you happen to live in Kansas? — the state of Kansas has been running a several year long experiment in trickle down economics to disastrous results.
Don’t believe me? Even Forbes Magazine says so.
Sam Brownback, a former United States Senator, was elected Governor back in 2010 and assumed the Governorship in 2011. He immediately began to embark on his experiment in conservative economics.
In May 2012, Brownback signed into law an act that eliminates income taxes for the owners of 191,000 businesses, and cuts individual income tax rates. The act shifted the tax burden from wealthy Kansans to low-and-moderate income taxpayers, with the top income tax rate dropping by 25%. Kansas also lowered the sales tax and eliminated a tax on small businesses. Brownback described the tax cuts as a “live experiment” at the time, confident as he was that the experiment would succeed.
It has not succeeded. During the 2013 fiscal year, Kansas was still in reasonably good shape: it had more than $700 million in a reserve fund, required by law to be kept at 7.5% of expenses. But after the tax cuts kicked in, revenue in the 2014 fiscal year came in $333 million below projections. Spending fell by around $150 million, but the state still faced a deficit of $329 million. Now seven months into the 2015 fiscal year, there is a real problem. In January, Kansas revenue came in $42 million below projections. Altogether, new projections estimate the 2015 shortfall at $344 million. And since Kansas, like most state governments, by law can’t run a deficit, it has to fill that gap before the fiscal year ends on June 30.
Despite ample evidence that his live experiment was not working, the voters of Kansas chose to return Sam Brownback to office in 2014, by the narrowest of margins.
And now, last night, we had the spectacles of the Kansas House voting for the largest tax increase in the history of the state, at the urging of the very same Governor Brownback. According to the New York Times:
Republican leaders pushed a new plan for raising taxes through the Kansas House early Friday morning, hours after top aides to GOP Gov. Sam Brownback warned them that failing to erase a budget deficit risked funding for universities and invited a downgrading of the state’s bond ratings. Brownback was forced Thursday to publicly plead with Republican legislators to increase the state’s sales and cigarette taxes to balance the next state budget. His pitch — and his aides’ warnings that he would otherwise have to take drastic action early next week — prompted GOP lawmakers to tinker with a plan that had failed early Thursday in the House by a wide margin. They considered a package of two bills.
This isn’t the first time that trickle down economics hasn’t worked. It actually didn’t work under Ronald Reagan, where it created the largest budget deficits in the history of the United States. And where it was disowned by its own architect, former Reagan Budget Director David Stockman. But just like a vampire, trickle down theory keeps rising to live again. Let’s hope that this time we can drive a wooden stake through it’s heart.
Reblogged this on xdayschocolate.
It really comes down to a lesson we all learned…well, must of us learned…growing up: nothing is free—especially tax cuts. You have to pay for them like everything else in life. Ultimately the way Republicans have applied supply-side economics has bankrupted our nation and states like Kansas. Our national debt has been driven mostly by Republicans and Republican Presidents talking about small government and lower spending on one hand and then on the other increasing spending and cutting taxes until they must support the programs “their” constituents demand (Medicare, Social Security, Farm Aid, Corporate tax breaks, oil subsidies etc, etc) with borrowed money, leaving a legacy of massive debt for future generations.
It’s a legacy of ashes.