The economist who helped wreck Kansas economy is Trumps new budget cheerleader
Last edited Tue Oct 17, 2017, 08:45 AM - Edit history (1)
Oh hell, this is just great. If you know anything about the disaster they created in Kansas... grab your wallet in one had and start fighting back with the other!
The economist who helped wreck Kansas’ economy is Trump’s new budget cheerleader
What could possibly go wrong? Art Laffer has firsthand experience.
AARON RUPAR
OCT 16, 2017, 12:33 PM
https://thinkprogress.org/trump-art-laffer-tax-cuts-kansas-7aa427240148/?utm_campaign=trueAnthem:+Trending+Content&utm_content=59e5723604d30121bbb9bc43&utm_medium=trueAnthem&utm_source=twitter
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Five years ago, Laffer — a longtime champion of supply-side “trickle down” economics — made $75,000 helping Kansas Gov. Sam Brownback (R) shepherd a package of tax cuts through the Kansas legislature. The state’s cuts were similar to those now proposed by Trump on the national level. In August 2012, Laffer promised a crowd at a small business forum in Kansas that the cuts would produce “enormous prosperity,” adding that they’ll “make a big difference in a decade.” They did make a big difference, but not in the ways Brownback and Laffer intended.
As ThinkProgress reported on the occasion of a bipartisan group of Kansas lawmakers rolling back Brownback’s economic policies in June, the drastic cuts — which included eliminating state income taxes for pass-through businesses — didn’t produce the growth Laffer foresaw. Instead, employment and the state economy both grew slower than the national rates, and the drastic decline in tax revenue coming into the state’s coffers blew a gigantic hole in its budget.
Kansas is in a fiscal crisis. Lawmakers have to close an over $300 million deficit by this month. Infrastructure spending has been put on hold, the state’s Supreme Court has ruled that public schools aren’t being equitably funded, and the failure to expand Medicaid has hurt vulnerable Kansans and cost the state billions.
All of these factors served as a wake-up call to state lawmakers, who have finally turned on Gov. Sam Brownback (R) and rejected his economic policies. On Tuesday night, a coalition of Kansas lawmakers — conservatives, moderate Republicans, and Democrats — rolled back tax cuts that haven’t delivered on the promise of stimulating the state economy. Kansas will raise taxes $1.2 billion over the next couple years to cover its deficit.
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While slashing taxes didn’t stimulate the economic growth Laffer promised in Kansas, the Trump administration wants you to believe that the growth fairy will come through if they’re enacted nationally. Late last month, Commerce Secretary Wilbur Ross told CNBC that Trump’s tax cuts “will increase the [gross domestic product annual] growth [average] by 1 percentage point,” from 2 percent to 3 percent — growth that would help pay for the cuts. Trump himself characterized his plan as “rocket fuel” that will help propel economic growth.
But Kansas’ experience illustrates that despite what supply-siders like Laffer would have you believe, slashing taxes doesn’t guarantee growth. They are, however, almost certain to reduce federal revenues — one study cited by the Times estimates Trump’s plan “could reduce federal revenues by at least $41 billion a year,” with $39 billion of that reduction coming “from existing pass-through owners paying lower taxes.”
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