Ciboski: Should Trump Use the Kansas Tax Experiment as a Model?
Does the Kansas tax cut experiment qualify as a model for national tax and revenue policy? Two of Donald Trump’s closest advisers on tax policy are economist Arthur Laffer and Heritage Foundation economist Stephen Moore. They were the architects of Governor Sam Brownback’s massive tax cuts that took effect on January 1, 2013. They predicted that these cuts would bring an economic boom to Kansas.
What has happened in Kansas since the Brownback tax cuts took effect?
According to the Center on Budget and Policy Priorities, total employment in Kansas has risen only 2.6 percent compared to a 6.5 percent rise nationally. Private sector employment has risen 3.5 percent compared to 7.6 percent nationally. Gross Domestic Product in Kansas has grown 4.8 percent since the end of 2012 while the national GDP through the first quarter of this year has risen 11.9 percent. The state’s share of newly opened businesses in the country has declined rather than increased.
Personal income tax revenues for the state’s 2016 fiscal year are 700 million dollars lower than was received in fiscal year 2013 when the tax cuts took effect .
The state’s General Fund ending balance, which is the state’s “rainy day fund” fell from more than $700 million in 2013 to $40 million in 2016, despite significant sales and cigarette tax increases.
The Brownback tax and revenue policies continue to create serious funding problems for the state. Two state legislators told me this past week that a budget cut is coming. One said that higher educational institutions will be cut and that K-12 education will be spared because of the lawsuit that has not been concluded.
Considering everything that’s happened in Kansas, is this still the direction Donald Trump wants to go?