RE: Conservatism is not some quarter baked ideology: the Kansas

Posted on: November 21, 2016 at 13:15:59 CT

Let’s break down what’s really going on. As this short analysis by Americans for Tax Reform confirms is the case, the Kansas Department of Revenues estimates the budget gap for fiscal year 2014 at $338 million. Part of that comes not because of any economic change but from a statistical revision made by the Kansas Division of the Budget late in the process that mistakenly upped the revenue estimates by $103 million based on what they believed were strong economic indicators. A third of the deficit, therefore, can be attributed to an accounting change, a manipulation of numbers on paper.

Data from the non-partisan Congressional Budget Office suggests as much as $147 million of the remaining gap was created by the decision of those who owed taxes on capital gains to shift those payments into prior fiscal years when the rate was lower. In a very real sense, President Barack Obama’s insistence that many of the Bush tax cuts be allowed to expire (including the lower rate on some capital gains) is more responsible for the current Kansas deficit than anything Brownback did – but it requires a greater familiarity with economics than most political reporters have to understand, let alone explain that. Another $10 million can be attributed to a decrease in excise tax receipts. People simply don’t buy as much in a bad economy as they do in a good one, meaning sales tax revenue declines.

[SEE: Cartoons on President Obama]

Brownback’s tax strategy for Kansas embraces the thrice-proven idea (under Coolidge, under JFK and under Reagan) that lower rates are an incentive for people to be more productive, to work harder because they get to keep more of what they earn. This leads to economic growth, creates new jobs, produces an environment in which new businesses start up and existing businesses expand and everyone – those at the top end of the income scales as well as those on the bottom – do better, meaning the gap between rich and poor actually narrows. It’s good public policy that is good for most everyone who does not depend on their ability to derive rents from the government for their economic well-being.

At best, the Brownback tax cuts account for less than $100 million of the actual gap between revenues and expense – which is really a drop in the bucket, especially when the state’s economy starts to pick up thanks to the improvements in the business climate his policies have created. Which means time is short – for the Democrats – to turn things around.

http://www.usnews.com/opinion/blogs/peter-roff/2014/10/08/democrats-wrongly-blame-kansas-gov-brownbacks-tax-cuts-for-budget-issues