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Re: is the shell game Trump's budget plan uses...

By: clo in ALEA | Recommend this post (0)
Mon, 31 Jul 17 12:32 AM | 38 view(s)
Boardmark this board | The Trust Matrix 		Msg. 22615 of 54959
(This msg. is a reply to 22613 by Cactus Flower)
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Exactly!

Kansas’ failed tax experiment offers economic lessons for Republicans at national level

By Sally Persons - The Washington Times - Monday, July 3, 2017

As President Trump and congressional Republicans ponder big tax cuts to boost the U.S. economy, Kansas has become a cautionary tale.

Prodded by Gov. Sam Brownback, a Republican, Kansas embarked on a major tax overhaul in 2012, reducing the top income tax rate from 6.45 percent to 4.9 percent and eliminating income tax on some businesses altogether.

Convinced they could turn the state into a heartland magnet for businesses seeking to flee high-tax states on the coasts, Republican lawmakers instead punched a huge hole in their budget. Facing mounting bills and shrinking revenue, the Legislature last month defied Mr. Brownback’s veto and moved to reverse some of its cuts.
Whether the Kansas experiment is a referendum on conservative, low-tax policies is an open question.

Obsession with tax rates often obscures other factors in businesses’ decision-making, such as the availability of a good workforce, quality of life for employees, and proximity to airports and other infrastructure, analysts say.

“You can’t just have the tax issue in isolation,” said Richard C. Auxier, a tax policy researcher at the Urban Institute. “There’s no clear link between tax cuts and growth.”

more:
http://www.washingtontimes.com/news/2017/jul/3/kansas-tax-cut-failure-an-economic-warning-to-repu/




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The above is a reply to the following message:
Re: is the shell game Trump's budget plan uses...
By: Cactus Flower in ALEA
Sun, 30 Jul 17 11:56 PM 		Msg. 22613 of 54959

Of course. Paul Ryan has been using this to make his budgets "balance" for years.

He claims the economy will grow faster if he cuts taxes. The more taxes he cuts, the higher the growth rate. Et voila! Whatever he proposes works. On paper.

This is basically voodoo economics. We know what actually happens. Reagan did it. It pushed payment for current expenditures into the future. So you end up with a budget deficit and pressure to reduce entitlements, with the wealthiest people as significant beneficiaries due to lower tax rates, enhancing the inequality which makes it so hard for poor people to take advantage of what is called the American Dream.

It was a worthwhile hypothesis and probably works at much higher tax rates. But that's not where the US is right now. Reducing tax rates at these levels results in reduced income.

This is the normal Republican playbook. It's why an informed, honest person who wants opportunity to be more widespread and harms to be generally reduced cannot support their economic policies. This, above all else, is why I prefer the Democratic Party.

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