Kansas is in the middle of an experiment, of sorts. The state elected an extremely conservative Republican governor, former senator and failed presidential candidate Sam Brownback, and elected a Republican legislature to do his bidding. Together with Arthur Laffer, they got to work approving a far-right policy agenda fit for the Koch brothers.
In late May, Brownback was so proud of his handiwork, he took a victory lap with an op-ed in the Wall Street Journal, boasting about his deep spending cuts and even deeper tax cuts.
Except as Josh Barro discovered, the Kansas way isn’t working.
Kansas has a problem. In April and May, the state planned to collect $651 million from personal income tax. But instead, it received only $369 million.In 2012, Kansas lawmakers passed a large and rather unusual income tax cut. It was expected to reduce state tax revenue by more than 10 percent, and Gov. Sam Brownback said it would create “tens of thousands of jobs.”
The governor’s assurances were based on dubious assumptions, and two years later, it’s hard to see any evidence of success.
For one thing, there’s been no burst of new hiring in Kansas. As Barro noted, job growth in the state “has been modest since he signed the bill, trailing the national average and the rate in three of its four neighboring states.”
For another, Kansas’ finances are a disaster. We recently learned that the state’s bond rating was downgraded in part due to tax breaks Kansas can’t afford. A Businesweek report added, “[T]he immediate effect has been to blow a hole in the state’s finances without noticeable economic growth.”
Brownback thought he was creating a template for other states to follow. Instead the far-right governor has created a case study in what not to do.
Christopher Ingraham flagged a candid assessment of the Kansas plan published by the Center on Budget and Policy Priorities.
“In truth, Kansas is a cautionary tale, not a model,” the CBPP found. “As other states recover from the recent recession and turn toward the future, Kansas’ huge tax cuts have left that state’s schools and other public services stuck in the recession, and declining further – a serious threat to the state’s long-term economic vitality. Meanwhile, promises of immediate economic improvement have utterly failed to materialize.”
Paul Krugman added that while the Kansas experiment failed, everyone involved should have known in advance that the outcome was inevitable.
There’s an important lesson here – but it’s not what you think. Yes, the Kansas debacle shows that tax cuts don’t have magical powers, but we already knew that. The real lesson from Kansas is the enduring power of bad ideas, as long as those ideas serve the interests of the right people.Why, after all, should anyone believe at this late date in supply-side economics, which claims that tax cuts boost the economy so much that they largely if not entirely pay for themselves? The doctrine crashed and burned two decades ago, when just about everyone on the right – after claiming, speciously, that the economy’s performance under Ronald Reagan validated their doctrine – went on to predict that Bill Clinton’s tax hike on the wealthy would cause a recession if not an outright depression. What actually happened was a spectacular economic expansion.
Regrettably, it won’t matter, because evidence just doesn’t seem to change the right’s mind. Brownback remains convinced, right now, that his policies were the right call, just as Darrell Issa believes there’s still an IRS scandal, John McCain believes war in Iraq is a great idea, and the entirety of the Republican Party believes the ACA is failing and the Benghazi conspiracy theories are true.
Brownback is up for re-election. One recent poll showed a competitive race.