OK, #nerdland, fill in the blank. Few issues divide Americans along party lines more than ______________. Race? Reproductive rights maybe?
How about this one: tax policy. Just think how reliable that “tax-and-spend liberal” cliche is in American elections.
The partisan debate about taxes is not just about obscure economic theories or deep ideological commitments. It also has measurable effects. In social science we might say, the idea that lowering taxes improves the economy is a “testable” hypothesis.
You remember hypotheses from middle school science. You make your best guess, then you conduct an experiment to see if you are right. Here in the U.S. there has been quite a tax experiment underway for the past two and a half years. The laboratory? The state of Kansas. And the evidence is in.
That is why my letter this week goes to the man who has been conducting the experiment.
Dear Governor Sam Brownback,
It’s me, Melissa.
In your state-of-the-state address this week it seemed you might be ready to concede that your experiment in dramatic tax reduction has failed. You admitted:
“My budget proposal recognizes that the current budget trajectory is unsustainable and that difficult solutions are required by state law as well as by fiscal prudence …”
The current budget trajectory is unsustainable? And who exactly set the current trajectory?
That’s you! Remember when you used your very first state-of-the-state back in 2011 to promise a reset of the Kansas tax code?
Well, you made good in May of 2012 when you signed historic tax cuts into law and claimed that as the state marched toward zero income tax it would quote “create tens of thousands of new jobs and help make Kansas the best place in America to start and grow a small business.” You followed that up with even further income tax cuts in 2013.
But the jobs, and small business growth, and booming prosperity you hypothesized did not materialize. Instead, as a result of your experiment last April, Moody’s downgraded your state’s credit score. And Standard and Poors followed with a credit downgrade for Kansas in August. The downgrades reflected a reality your sunny disposition did not. Your tax cuts have created a 1 billion dollar revenue loss and run up a staggering budgetary shortfall, estimated to be as large as 280 million dollars.
And that is after you cut education funding so ruthlessly that the Kansas Supreme Court declared it unconstitutional.
Even after you relied on the Obamacare drug rebate program to help stem the financial hemorrhage. The same Obamacare you have strenuously opposed.
So there you stood on Thursday night. A Republican governor, determined to use his state as a laboratory to test the idea that lower taxes are the solution to most problems. You tried it. It failed. And it seemed like maybe you were ready to admit it when you called for greater fiscal prudence and even for new taxes. Whew! Finally, some clarity that Kansas needs more revenue.
Then came the details … Stick with phasing out the state’s income tax. But hike up taxes on cigarettes from 79 cents per pack to $2.29 per pack. And liquor? You plan to raise that tax from 8% to 12%. You certainly are consistent. You still have no intention of asking the highest earners to pay their fair share. Instead, the poorest people in your state will bear the brunt of your mistakes. Because, as The Guardian reports:
“A tax system with zero income tax and high sales tax may seem like the picture of equality, … it’s punishing to the poor. Taxing a tenth of every dollar paid at the corner store isn’t much when there’s millions in the bank, but it’s quite a lot for someone earning minimum wage.”
Looks like you are determined to proceed with your failing experiment despite all the evidence that it is time to stop. At least now, American voters will know better than to let you turn the White House into your next laboratory.