They really don’t care about growth, they just want to cut taxes on the rich

Russell Berman describes yet another example of the old sleight of hand practiced by supply-side politicians, this time in the state of Kansas, where the governor Sam Brownback came into office promising that tax cuts would boost the economy of that state so much that it would more than compensate for the loss of revenue.

The yawning deficit is widely blamed on the deep income tax cuts that Brownback, along with a Republican legislature, enacted during his first two years in office. They not only slashed rates, but more importantly, they created a huge exemption for business owners who file their taxes as individuals. By Brownback’s own description, the tax plan was a “real live experiment” in supply-side economics, with the idea being that lower taxes would spur investment, create jobs, and refill Kansas’s coffers through faster growth. Yet even under the most charitable analysis, revenue has plummeted much faster than the economy has expanded.

Now, Kansas’s red ink has left the governor red- faced. Brownback is asking Republican state lawmakers to slow the income tax cuts over the next few years, raise taxes on cigarettes and alcohol, overhaul school funding, and divert money from the state’s highway fund in order to balance the budget. It’s not as if he’s abandoning his conservative economic philosophy—he still wants to replace the state’s income tax entirely with consumption taxes over time.

We are seeing this process repeated here in Ohio. First they cut income taxes on the rich promising that it will spur so much growth that it will generate more revenues than were lost in income taxes. Then when that fails to materialize, they raise taxes, but not on income. Instead they raise sales and other consumption taxes that disproportionately fall on lower income groups since they have to spend almost all their income to live while the wealthy spend only a small fraction of their income on the things on which taxes have been raised.

By now, everyone should realize this and stop believing in the magic income tax cut fairy that will bring prosperity to everyone.


  1. says

    But the fairy only fails to exist because you don’t believe, Mano. Like Tinkerbell, you really need to believe! Close your eyes, yell, “I believe Supply-Side Fairy! I believe!” and start smoking enough to balance the budget on tobacco tax and it’ll all work.

  2. doublereed says

    He completely demolished the state education budget. I think it’s weird to describe him as “red-faced” when he’s unabashedly continuing forward. This is was the plan all along.

  3. moarscienceplz says

    Not that damned Laffer Curve again! If I had a time machine, rather than use it to kill Hitler, I think I would use it to stop Jim Laffer from scribbling on that stupid napkin. So much misery has been caused by that. The truest thing G. H. W. Bush ever said was when he called it Voodoo Economics.

  4. raven says

    Krugman called it a few months ago. The enduring power of a wrong idea i.e supply side economics.

    1. They know it doesn’t work. It almost always fails.

    2. They do it anyway. Bush did it too and it ended up ballooning the national debt. We are still suffering from his tax cuts.

    3. Of course, the real goal is to make the ultra-rich richer. The Koches are from…Kansas and a major Brownback supporter.

  5. raven says

    It’s a familar cycle in Wisconsin, Kansas, Louisiana, and other states doomed by GOP governors.

    1. Cut taxes using the not so magical supply side economics fallacy.
    2. Deficits balloon because magic doesn’t work.
    3. Cut services. Half of all state budgets are education. This hits children and the poor the most. End of deficit problem.

    4. Repeat until the voters toss you. If they every bother to do so.

    FWIW, Minnesota under a Democratic governor raised taxes. They are near the top in economic growth.

    FWIW, the fault isn’t Brownback’s. He is what he is. Toads got to be toads. It’s the voters of Kansas who elected him twice knowing he was going to wreck the state.

  6. raven says

    The hates of the fundies are legion. Three of the current ones are children, education, and universities and colleges.

    Wisconsin cut the budget of their world class system that has U. of Wisconsin. Jindal wants to cut the Louisiana university system by 40%, basically a death blow. Kansas and Arizona same thing.

    There are two forms of capital, money and human. Education costs money but it also pays off big time. There are no First World countries full of illiterates.

    This is a topic too long for a comment box. But IMO, education fixes a lot of things and is the closest we have to…magic that works.

  7. brucegee1962 says

    But, but, the more educated someone is, the less likely they are to vote Republican. So it all makes perfect sense.

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