Friday, November 14, 2014

Kansas: Poster Child for Republican Economic Policy

Beyond courses in micro and macro long ago, I don't have a great knowledge of economics. That may still be more than Arthur Laffer has.

Gov. Sam Brownback and his celebrity tax policy consultant, Arthur Laffer, said Tuesday that the income tax cuts Kansas lawmakers approved earlier this year will drive growth and make Kansas more competitive with surrounding states.

That was in August of 2012. And also:

Laffer said his studies show states with lower tax rates outperform high-tax states — a notion several other tax policy analysts say is misleading. Laffer said lower taxes may not work every day of every week, but he said economic growth is consistently driven by low-tax, low-regulation policies.

Ensconced here in the high tax, high regulation state of New York, it's interesting to see how this experiment in supply side progresses. 

Kansas will face a $279 million budget shortfall by July, far worse than state officials had thought before a new revenue forecast Monday that will force Gov. Sam Brownback and legislators to consider spending cuts.

The state will also be required to close an even bigger additional gap — $436 million — during the following 12 months, according to the new forecast.

What to do moving forward?

Brownback and many Republicans in the GOP-dominated Legislature are not publicly rethinking aggressive cuts in personal income taxes enacted in 2012 and 2013 to stimulate the economy. The state cut its top rate 26 percent and exempted the owners of 191,000 businesses from income taxes altogether, and further reductions are promised, including a decrease in the top rate next year.

Double down! Not sure it works at casinos (not being a gambler), but maybe it works with state budgets. Nothing to do but stay tuned.

Just wanted to throw in this bit of apostasy:

A board of medical professionals appointed by Gov. Rick Perry said Wednesday that the state should provide health coverage to low-income Texans under the Affordable Care Act — a move the Republican-led Legislature has opposed. 

Say it ain't so, Rick!

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