Remember this is Kansas. The state that has declared war on teaching evolution.
Four years ago Sam was elected Kansas’ governor in a landslide after a 14 year career in the U.S. Senate. Sam is a strong believer in “supply side economics” or what many of us call “trickle down economics”. Basically this economic theory claims that if we cut income taxes, especially to the richest among of us, that will stimulate the economy. The people who get to keep more of their money will invest it. Ordinary people spend more money. Small businesses, who benefit from this increase in spending, will expand and hire more workers. The money lost on the tax cuts will be offset by more money in income taxes by the people who are hired and the sales taxes paid by the people who spend more.
The best part of this model is that it both looks good and feels good. Who doesn’t want to raise revenue by cutting taxes? Here’s the problem: it doesn’t work. It’s like all the “eat whatever you want and lose weight” diets.
Four years ago Sam was elected and he promised “an experiment.” OK, I have to ask this: someone who has declared war on science is conducting an experiment? In any case he promised to cut state income taxes on small businesses and wealthy individuals and he did. Small business taxes were cut to 0% (that’s right: no taxes) and the highest individual tax bracket was cut by 24% (you can see this here). He promised that while state revenue may take an immediate hit, it will be soon made up by people and businesses who move to Kansas to take advantage of this experiment.
Did it work? No. The NPR story provides an excellent outline of what happened, but basically this is what happened: small businesses benefitted because they didn’t pay taxes but they didn’t expand because there was no increase in business. NPR spoke with Alex Harb, who owns a computer store in Wichita. He spoke about how his tax cut allowed him to purchase more products for his store, but this has not led to an increase in business. Because of this he has not opened new stores or hired more employees. He has not become a job creator.
Is there a downside? Amazingly the supply side/trickle down guys don’t talk about this. Kansas anticipated a drop of $300 million in revenue while the tax cuts kicked in. Alas, they saw a drop of $600 million with no end in sight. If you are wealthy Kansan or a small business owner you have more money in your pocket. But if you work for the state you’re screwed.
The town of Marquette, Kansas was so devastated by the tax cuts that they had to close their last remaining school. You can read this on the Topeka Capital-Journal website. Amazingly the loss of jobs by the school district wasn’t expected by Sam.
So how has the state done? Sam promised that his “experiment” would show that Kansas’ economy would outpace the economies of neighboring states. Has it?
No. Employment in Kansas has grown by about two percent in Kansas, which sounds fine until you recognize that, according to the NPR article, Kansas has fallen behind the national average and three of the four states that border Kansas (and they all have higher tax rates).
I found this at the web page for the Joint Economic Committee of the U.S. Senate. They track several trends, and I looked at private sector job growth since February of 2010. Kansas and its neighbors (Missouri, Oklahoma, Colorado, and Nebraska) showed these results:
- Colorado: 12.8%
- Oklahoma: 10.8%
- Kansas: 6.8%
- Nebraska: 6.1%
- Missouri: .8%
According to this Kansas is in the middle of the pack. That’s fine except Sam promised they would leave their neighbors in the dust. Clearly he hasn’t.
The best part of this story for me is the loyalty Sam expected from his fellow Republicans. He should have recognized Republican loyalty is a synonym for jumbo shrimp. Given the opportunity they headed for safety. This story shows how 100 prominent Republicans are endorsing his Democrat opponent Paul Davis. Do you think these Republicans endorsed Davis out of principle? Neither do I. They made a political decision that their future lies in abandoning Sam after cheering him on.
Sam may win or lose, but if he wins, the people of Kansas lose.