Posts Tagged ‘Trickle Down Economics’

More evidence of the failure of trickle down economics, this time perpetrated by Kansas Governor Sam Brownback, who took only two years to bankrupt the State of Kansas.

From the Vox article:

The governor proposed to cut income taxes on the state’s highest earners from 6.45 percent to 4.9 percent, to simplify tax brackets, and to eliminate state income taxes on most small business income entirely. In a nod to fiscal responsibility, though, he proposed to end several tax deductions and exemptions, including the well-liked home mortgage interest deduction. This would help pay for the cuts.

Yet as the bill went through the state Senate, these deductions proved too popular, and legislators voted to keep them all. The bill’s estimated price tag rose from about $105 million to $800 million, but Brownback kept supporting it anyway. “I’m gonna sign this bill, I’m excited about the prospects for it, and I’m very thankful for how God has blessed our state,” he said.

After the cuts became law, it was undisputed that Kansas’s revenue collections would fall. But some supply-side analysts, like economist Arthur Laffer, argued that increased economic growth would deliver more revenue that would help cushion this impact.

Yet it’s now clear that the revenue shortfalls are much worse than expected. “State general fund revenue is down over $700 million from last year,” Duane Goossen, a former state budget director, told me. “That’s a bigger drop than the state had in the whole three years of the recession,” he said — and it’s a huge chunk of the state’s $6 billion budget. Goossen added that the Kansas’s surplus, which had been replenished since the recession, “is now being spent at an alarming, amazing rate.”

Of course, it’s all President Obama’s fault. “This is an undeniable result of President Obama’s failed economic policies of increasing taxes and overregulation,” Brownback’s revenue secretary Nick Jordan said.

These people are seriously deluded. And dishonest, too. Evidently, Brownback is in a tight re-election race in a deep red state. If he loses, of course that will be President Obama’s fault, too. I can hardly wait to hear his excuses.

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