The conventional wisdom of the chattering class says Kansas made a mistake when it cut taxes. The Kansas City Star swallowed that conventional wisdom whole hog in a recent editorial critical of my organization and laudatory of state legislators who voted in June to raise taxes over Gov. Sam Brownback’s veto. The Star and the legislators got it wrong on all counts.
A lot of nonsense has been written about the Kansas tax cuts. Instead, let’s talk some common sense. For starters, in what universe is raising taxes a demonstration of courage? There are few things legislators do that are less courageous than digging deeper into the pockets of taxpayers because they couldn’t muster the courage to cut spending, then taking a bow while their allies in the press shower them with huzzahs.
It’s ironic that The Star said the 115 lawmakers who voted to override Brownback’s veto of the $1.2 billion tax increase deserve the John F. Kennedy Profile in Courage Award. Kennedy, unlike those now invoking his name, understood that cutting taxes led to economic growth, jobs and higher wages. During the five years following Kennedy’s tax cuts, signed into law only months after his death, average quarterly GDP grew 5.2 percent and the economy added 9.3 million jobs.
So while the 2012 tax cuts would have let Kansans keep $4.5 billion more of their own money, the state increased spending in 2012 by $432 million. That’s not courageous. That’s irresponsible.
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Meanwhile, the tax cuts worked. In 2012, Kansas saw more than 15,000 small businesses open, the most in state history.
The year of 2013 opened with a state unemployment rate of 5.5 percent. By the end of the year, it was down to 4.9 percent. Such improvements were not universal, either. Kansas’ rate was a full point lower than neighboring Missouri’s at the end of 2013. Kansas’ rate now stands at 3.8 percent. The state’s small business climate improved to the point where the Kauffman Foundation gave Kansas a grade of “A” in 2013.
But with all this good news, the Legislature simply couldn’t restrain itself. Former state treasurer and now U.S. Rep. Ron Estes noted in The Wall Street Journal that “between the 2010 and 2018 budget years, during this era of supposedly devastating cuts caused by right-wing tax policy, lawmakers raised expenditures from $5.3 billion to $6.6 billion,” a 24.5 percent increase. Not much courage there.
The Star would have you believe that in overriding Brownback’s veto the Legislature “put an end to the governor’s shortsighted tax-cut experiment that had ushered in an era of fiscal irresponsibility.” In reality, all it put an end to was lower tax rates. The irresponsibility continues apace. Kansans will feel the effects soon enough as the state lays claim to hundreds of millions of dollars that otherwise would be ours to spend on gas and groceries, or to save for college or a vacation.
The Legislature could raise taxes from now to kingdom come and not keep up with demands for more spending. Meanwhile, the tax increases will slow the economy and depress job growth.
Jobs — and people — will go elsewhere. It’s happening in other states, and it will happen here. Then what? These supposedly courageous lawmakers are going to be faced yet again with the same dilemma.
Will they take the coward’s way out and repeat the mistake of increasing the tax burden on hard-working Kansans? Or will they finally show a real profile in courage and get state spending under control?
Jeff Glendening is Kansas state director of Americans for Prosperity, a free-market think tank.