Kansas Governor Sam Brownback |
Kansas Governor Sam Brownback enacted the broadest tax cuts in Kansas history. He also signed into law comprehensive legislation which defends the life of the unborn, as well as comprehensive reforms in public education, welfare, and healthcare. As one of many governors post 2012 with like-minded legislative supermajorities, the former US Senator and Presidential candidate could experiment with free market reforms long touted by Republicans and conservatives, yet neglected because of Democratic opposition.
After following through on these
campaign promises, Brownback is struggling for reelection. One hundred fellow Republicans have endorsed his
Democratic challenger Paul Davis. He has angered members of his own party
because is reforms cut programs which those Republicans championed or relied
upon. Many of those Republican dissenters lost their seats to Brownback
Conservatives now venting their bitterness. This mounting opposition may amount
to Brownback's defeat from the majority of aggrieved minorities, according to
local reports.
Ignoring the political blowback,
have Brownback's reforms lived up to the claims of conservative policy wonks or
have they failed to deliver on their pretended promises?
Tax fighter Grover Norquist submits that Brownback is under
attack from the Left because his proposals will eliminate numerous tax burdens,
and will work out. Those reforms will phase out incomes taxes on individuals
and businesses as state revenues increase. Brownback's success in November will
encourage other red state governors to pursue similar cost-cutting, limited
government reforms.
Grover Norquist |
Norquist elaborates:
The genius of Brownback’s 2013
legislation to abolish the income tax over time is that the law now states that
each year that state revenue comes in above a two percent increase—and this
happens in a normal period of modest growth—all the additional revenue is used
to permanently reduce the state personal income tax.
Writing for the National Review, Amity Shlaes highlighted the success of
Brownback's reforms:
The governor led the state
legislature in implementing a series of tax cuts that included a staged
reduction in income-tax rates and the repeal of taxes on sole proprietorships.
The state also took little steps to lure or keep business and families. Example:
phasing out mortgage-registration fees. In other words, Brownback put out the welcome mat.
The results:
Bureau of Economic Analysis data show that
non-farm proprietor income, a.k.a. revenue from businesses, including
corporations, LLCs, and sole proprietorships, rose 26 percent from the first
quarter of 2011 to the first quarter of 2014. This rate is higher than those of
neighbors Colorado, Missouri, Oklahoma, and Nebraska, and also higher than the
nation’s average. Unemployment, every politician’s hot topic, is at 4.9 percent
in Kansas, lower than in nearby Missouri, Ohio, and Illinois. According to
state economists, the share of total jobs that are private-sector non-farm jobs
has risen by 17 percent relative to early 2011.
Low unemployment and booming
businesses have met against budget shortfalls, because the projected revenue in
2013 was half of what Brownback had predicted. Compared to her neighbor states,
the Sunflower State is blooming broader and brighter.
Aerial view of Kansas City, Kansas (Which had marked economic improvements over Kansas City, Missouri) |
However, tax and spending cuts do
not create automatic wealth. Despite the budget shortfalls, Shlaes defends
Brownback's reforms in relation to the expiration of the Bush tax cuts for 2013
also pushed Kansas investors to recoup their profits early, while diminishing
the final tally in 2013 and 2014.
Despite conservative defenders,
Brownback’s reforms have many detractors. The New York Times could not
ignore the budget shortfalls.
Guest Columnist Josh Borro starts out with “Kansas has a problem”, yet he did recognize
the Bush Tax cuts, then suggested that the Kansas legislature cut taxes deeper
than anticipated. His criticism leaves out empirical data, rendering his
criticisms less credible. Ironically, the writer points out that as a freelance
writer, he would earn more money because of a tax-free income as a sole
proprietor in Kansas:
The Times has me on its staff, but
it could commission freelance work from me instead. Income from the same work
would then become tax-free under the Kansas rules.
Even in faulting Brownback's tax
rollbacks, Borro admits he could be saving money under those reforms.
Voices for Liberty in Wichita outlined the
success of these policies, as well as the source of the apparent failures:
While tax reform hasn’t produced the
“shot of adrenaline” predicted by Governor Brownback, the problem is one of
political enthusiasm rather than economics. Most elected officials are
prone to effusive optimism for their ideas, just as opponents to their ideas
can often be counted upon to distort and deliberately misstate information in
pursuit of their own beliefs.
Then
Relocating a business is also not
something that happens quickly. For starters, leases might have several
years to run before a move is feasible.
The data are clear in low-tax
states, that business is better, jobs are more plentiful.
What about Kansas? Where’s the
money, so to speak?
Kansas pushed through these tax cuts
at a unique time, as the United States was exiting a deep recession, as the
federal government was raising taxes, and the regulatory state was expanding
under ObamaCare. Besides, based on a number of economic metrics, Brownback’s reforms
are spurring growth, and like all major reforms, time is essential for the
long-term benefits to develop.
Politically, however, time is at
best a limited asset, which Brownback is losing, and with an aggressive,
liberal media keen to pick out faults and declare conservative experiments a
failure, Brownback has his back to the wall, and may lose reelection despite
the innate efficiency (and long-term inerrancy) of his reforms.
Kansas Summer Field |
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