Kansas cut taxes, California raised them. What happened?

[Yo_Mama_Been_Loggin]

In 2012, voters in California approved a measure to raise taxes on millionaires, bringing their top state income tax rate to 13.3 percent, the highest in the nation. Conservative economists predicted calamity, or at least a big slowdown in growth. Also that year, the governor of Kansas signed a series of changes to the state's tax code, including reducing income and sales tax rates. Conservative economists predicted a boom.

Neither of those predictions came true. Not right away — California grew just fine in the year the tax hikes took effect — and especially not in the medium term, as new economic data showed last week.

Now, correlation does not, as they say, equal causation, and two examples are but a small sample. But the divergent experiences of California and Kansas run counter to a popular view, particularly among conservative economists, that tax cuts tend to supercharge growth and tax increases chill it.

California's economy grew by 4.1 percent in 2015, according to new numbers from the Bureau of Economic Analysis, tying it with Oregon for the fastest state growth of the year. That was up from 3.1 percent growth for the Golden State in 2014, which was near the top of the national pack.

The Kansas economy, on the other hand, grew 0.2 percent in 2015. That's down from 1.2 percent in 2014, and below neighboring states such as Nebraska (2.1 percent) and Missouri (1.2 percent). Kansas ended the year with two consecutive quarters of negative growth — a shrinking economy. By a common definition of the term, the state entered 2016 in recession.

Other effects of the Kansas tax cuts, which were meant to spur entrepreneurship, are well-documented.

While state officials anticipated that the reductions would create a shortfall in the state budget, tax revenues have been consistently below even those expectations. Standard & Poor's and Moody's Investors Service have signaled that they could reduce Kansas's credit rating, indicating there is a chance the state cannot pay its bills.

http://www.heraldnet.com/article/20160618/NEWS02/160619133

[NNadir]

1. Thanks for posting this. As Justice Oliver Wendell Homes once said, "Taxes are the price we...

...pay for a civilized society."

The anti-tax rhetoric that has permeated the Republican nonsense since the Reagan years has done great damage to the future.

[malaise]

2. In a just world those who have bankrupted states while giving

tax breaks to the rich (for campaign funds) should be sent to prison.

[Gothmog]

3. Tax cuts and supply side economics do not work

[REP]

4. Kansas has one wealthy county; California has many

Johnson County, Kansas is one of the wealthiest counties in America and is certainly the wealthiest in Kansas. When you look at other Kansas counties, the next wealthiest county is far behind Johnson county. There's only so much blood you can get from one county.

California's wealth, on the other hand, is spread out all over. Where I live, I'm in and surrounded by wealthy counties. There are more to the immediate north and south and even more in northern and southern regions. What works here won't work in Kansas.

One thing that works here that would work for Kansas and Kansans is making groceries exempt from sales tax. The rate was raised last year from 6.15% to 6.5% while Missouri lowered theirs from 4.225% to 1.225% some years ago. Raising the tax rate on groceries was yet another wrong approach by Kansas as was lowering other taxes.

[Yo_Mama_Been_Loggin]

5. In Washington we have no sales tax on food

Haven't for over 30 years. Also no income tax. Yet we get by.

But then the Puget Sound region subsidizes the rest of the state.

.