Kansas Crippled As GOP Tax Cuts Fail To Magically Boost Economy

Kansas posted the third largest drop in state tax revenue in the country, according to a survey from the U.S. Census Bureau. This news comes as Kansas continues to prove that cutting taxes for the wealthy isn’t a foolproof way of growing the state’s economy. Now that their financial house is in chaos, they struggle to fill a growing budget deficit.

State representative Jerry Henry (D) said that Kansas historically has positive revenue growth, but that’s only changed since the changes to their tax policy. According to The Topeka Capital-Journal, Henry said that projected revenue from economic growth haven’t materialized.

Governor Sam Brownback cut the already-strapped state education budget to make up some of the shortfall, because clearly, cutting education always works. The result of that is that Kansas’ schools are unable to even finish out the academic year. They literally do not have enough money to stay open through the end of the year.

So now, the Capital-Journal is saying that the state is also looking at raising tobacco and liquor taxes to help fill the deficit, among other things. But an article in the Washington Post says that Kansas’ low-income residents already shoulder a larger burden of the state’s taxes, as a percentage of income, than the wealthy do. They’re paying 11.1 percent of their income in taxes (including sales and excise taxes), compared to just 3.6 percent for the wealthy.

The Post says that Kansas’ economy has been growing at “the same plodding pace as the rest of the country.” So it’s not like their economy has been shrinking, but the tax cuts that Brownback and other Republicans hailed as the fix Kansas needs to become Texas and Florida have, thus far, proven to be a massive failure.

We have other red states, though, like North Dakota, whose revenues have grown considerably despite certain tax cuts. The reason this isn’t comparable to Kansas, though, is because North Dakota is home to the Bakken oil shale formation, where much of our current fracking boom exists. The oil and drilling industries have been flocking to North Dakota to exploit the Bakken formation.

Relying on oil, though, for tax revenue is a problem. Besides that, North Dakota’s House just okayed a tax cut for the oil industry, which Republicans think ensures better certainty for the state and the industry, but Democrats say could cost billions in future tax revenue. As Kansas has demonstrated, cutting taxes to change trends doesn’t always work, and more often than not, results in lost revenue.

Will we someday see the end of this idea that tax cuts for the wealthy are an economic stimulus? One can hope, but it’s not likely. Kansas, and other states, will have to hit rock bottom and get desperate before they even start to question the failed idea that is trickle-down economics.

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