Fascinating look at the economy of Kansas, as compared to its neighbors, which all have similar economies:
Earlier this year, Kansas’ GOP-controlled legislature voted to effectively end a five-year push to slash taxes on individuals and businesses after revenues plummeted and forced deep cuts and tax hikes elsewhere. In doing so, they overturned a veto by Gov. Sam Brownback, a Republican who drew national attention in conservative circles when he launched his ambitious tax-cut program in 2012.
For Democrats, Kansas has become Exhibit A in their prosecution of the Trump tax cuts. It’s routinely cited as evidence the new GOP proposal won’t grow the economy or pay for itself, and that proposed business tax reduction similar to Brownback’s will create a new loophole for wealthy individuals to exploit.
“It was a real-life experiment in a Republican state, similar to what President Trump announced,” Minority Leader Chuck Schumer, D-N.Y., said on the Senate floor. “It added so much money to their deficit over four years that they have had to figure out ways to raise taxes now, just as Ronald Reagan did in 1986.”
The chart is also revealing:
click for larger graphic
Source: NBC News
The results were not as promised:
“Over the next five years, state and local governments battled over a dwindling revenue supply, including a roughly $700 million drop-off in the first year. Job growth, meanwhile, lagged behind the national average and neighboring states.
Financial ratings agencies, unimpressed with boasts of an impending boom, downgraded the state’s debt in 2014. Standard & Poor’s blamed Kansas’“structurally unbalanced budget” while Moody’s also cited the income tax cuts in lowering its outlook.”
The current debate is whether the proposed tax cuts will result in similar results…
Source:
The GOP Tried Trump-Style Tax Cuts in Kansas. What a Mess.
BENJY SARLIN
NBC News, OCT 22 2017
https://www.nbcnews.com/politics/white-house/amp/gop-tried-trump-style-tax-cuts-kansas-n812701
Previously:
The Kansas Supply-Side Experiment Unravels
Barry Ritholtz
Bloomberg, June 19, 2017
https://www.bloomberg.com/view/articles/2017-06-19/the-kansas-supply-side-experiment-unravels
How Much Can You Cut Taxes? Don’t Ask Kansas
Barry Ritholtz
Bloomberg, March 20, 2017
https://www.bloomberg.com/view/articles/2017-03-20/how-much-can-you-cut-taxes-don-t-ask-kansas
Kansas Ends Bad Economic News by Not Reporting It
Barry Ritholtz
Bloomberg, October 24, 2016
https://www.bloomberg.com/view/articles/2016-10-24/kansas-ends-bad-economic-news-by-not-reporting-it
Supply-Side Doom in Kansas
Barry Ritholtz
Bloomberg, April 17, 2015
https://www.bloomberg.com/view/articles/2015-04-17/a-supply-side-experiment-was-a-loser-for-kansas
