The Republican plan to make extreme cuts in Kansas’s taxes played by all the rules of conservative trickle-down theory, and made all the promises. It would pay for itself through economic growth … except it didn’t. It would cause corporations to flock to the state … except they didn’t. It would turn Kansas into a shining example that proved the truth about conservative economics.
That much it did. It proved that conservative economics are a disaster—one that Trump wants to repeat on a national level.
When Brownback outlined his plan in 2012, he, too, said the tax cuts would pay for themselves. “He too said the tax cuts would benefit everybody, [that] they would be be ‘a shot of adrenaline to the heart’ of the Kansan economy,” said Goossen.
Instead, Goossen claims, the money has gone to a small group of wealthy Kansans while the state’s budget has been left with a roughly $1bn shortfall.
Not only does Trump’s plan operate on the same Laffer-Curve, Supply Side, Trickle-Down theory that has failed to work since the time when George H. W. Bush dubbed it “voodoo economics,” Trump has recreated the worst feature of Brownback’s catastrophe—a system designed to allow the wealthy to avoid income tax by masquerading as “small businesses.
The Republican tax rewrite unveiled this month aims to jump-start economic growth in part by establishing a 25 percent tax rate on small businesses and other firms that operate as pass-through entities, a cut from the top rate of 39.6 percent that such business owners pay now.
But the abandoned experiment in Kansas points to how a carve-out intended to help raise growth and create jobs instead created an incentive for residents, particularly high earners, to avoid paying state income taxes by changing how they got paid.
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Author: DAILY KOST