Aside from all the scandal, GOP ideology took a big blow today with Kansas voting to revoke the trickle down economic policies that have killed it's state budgets. The Replublican state legislators overrode the Governor's veto and rolled back the tax plan that had seen huge tax cuts to high income taxpayers that resulted in huge drops in state revenue as well as economic growth.
Contrast this with California where they voted to increase taxes on high income taxpayers where the revenue has increased substantially and economic growth has gone the other way.
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From the moment he said it, Kansas Gov. Sam Brownback (R) took heat for calling his push to drastically cut taxes in his state a “real live experiment.” As a general rule, people like to have their experiments conducted in laboratories with safe controls, not on state finances that affect health care and education.
But Brownback was right. It was an experiment. And on Tuesday night, the Republican legislature in the state deemed it a failure, voting to override Brownback’s veto and increase income taxes cut under the 2012 bill.
Duane Goossen of the Kansas Center for Economic Growth walked The Washington Post through the numbers on Wednesday.
The tax-cut bill began to affect the state’s bottom line in the 2014 fiscal year (running from July 2013 to June 2014), Goossen said. From 2013 to 2014, the change in income tax rates meant $700 million less was coming into the state — a reduction of nearly a quarter of the revenue from that source.
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Since the state has to have a balanced budget, the drop in revenue immediately forced the legislature to come up with ways to reduce spending. The state depleted its reserves, moved hundreds of millions from its highway fund to its general fund, borrowed money and raised its sales taxes.
Contrast Kansas with the state of California and the country overall. Kansas has performed much worse than the country on job growth, relative to a January 2011 baseline. California has over-performed.
Why single out California? Because as Kansas was performing its experiment, California was performing one of its own, putting into place a new tax on high-income residents in the state. Over the past few years, the state has seen budget surpluses, though that may change as two-thirds of states project upcoming deficits.
Look for the examples of California and Kansas to be cited in income-tax debates for decades to come. Sometimes, experiments don’t have the results you were looking for.
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