# Start Here > Guest Forum >  Is the 2010-2017 Kansas experiment proof that tax cuts do not work?

## Unregistered

According to the media, Sam Brownback (then-Governor of Kansas) passed sweeping tax reforms, drastically cutting taxes for small businesses, cutting income taxes and so on. This was supposed to stimulate economic growth by giving consumers more purchasing power (which I thought was an Austrian concept, but as I delve into this, it sounds like tax cuts for capitalists, or in other words, consumers of capital goods, do more to stimulate the economy in the long run) but real wages did not increase, Kansas lagged significantly in economic growth behind the country at-large.... why was this? The Cato Institute even praised Brownback in 2012 and gave him an A-rating for fiscal policy, but made a small discretion about spending.

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## oyarde

Of course tax cuts work . If you consider work to encourage consumer spending . Consumer spending is what drives the US economy . People spend most of what they get mostly on things they do not need . These are in no way relative to wages or wage increases . In fact since the last crash you would expect growth and wages to be fairly stagnant . Small business is what drives the countries economy , if kansas is lagging that is the most likely place to look , everywhere is not equal . . Most likely without those positive actions taken kansas would be in worse shape than now .

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## Origanalist

Taxation is theft.

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## Zippyjuan

https://www.forbes.com/sites/beltway.../#20768b0e5508




> *The Great Kansas Tax Cut Experiment Crashes And Burns*
> 
> Just as President Trump is ramping up his push for a major tax cut that he believes will pay for itself through faster economic growth, the Kansas template for that approach has crashed and burned. After four years of below-average growth, deepening budget deficits, and steep spending reductions, the GOP-dominated Kansas legislature has repealed many of the tax cuts at the heart of Governor Sam Brownback fiscal agenda.
> 
> It is a lesson unlikely to be missed by congressional Republicansor Democrats.
> 
> Brownback vetoed the legislatures first attempt  to reverse his tax cuts, but two-thirds majorities in both the House and Senate overrode his veto. The measure would boost state taxes by $1.2 billion over two years, in part by raising the top income tax rate from 4.6 percent to 5.7 percent and by once again taxing sole proprietorships, partnerships, and other pass-through businesses. Pressured by Brownback, the legislature had made pass-throughs tax free.





> Since Kansas enacted tax and spending cuts in 2012 and 2013, Brownback and his allies have argued that this fiscal potion* would generate an explosion of economic growth. It didnt. Overall growth and job creation in Kansas underperformed both the national economy and neighboring states.* From January, 2014 (after both tax cuts passed) to April, 2017, Kansas gained only 28,000 net new non-farm jobs. By contrast, Nebraska, an economically similar state with a much smaller labor force, saw a net increase of 35,000 jobs.
> 
> The Deficit Explosion
> 
> While *overall employment barely increased and economic activity was lower than other states,* Kansas saw a significant increase in the number of individuals with business income.  The likely reason: That zero tax rate on pass-throughs.
> 
> *The tax cuts did produce one explosion, however. The states budget deficit was expected to hit $280 million this year, despite major spending reductions.* Kansas falls well below national averages in a wide range of public services from K-12 education to housing to police and fire protection, according to an analysis by the Urban Institutes State and Local Finance Initiative. Under order from the state Supreme Court, the legislature has voted to increase funding for public schools by $293 million over the next two years.
> 
> The more troubling lesson for Republicans in Congress: While Brownback was reelected in 2014*, his popularity has since plummeted and his approval rating now hovers at around 25 percent, second lowest among all sitting governors.* And while the GOP enjoyed tremendous national electoral success in 2016, the party lost seats in the Kansas legislature. At least in one deep red state, the Trump formula of big tax and spending cuts is no longer the path to political success.
> ...

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## Cleaner44

> According to the media, Sam Brownback (then-Governor of Kansas) passed sweeping tax reforms, drastically cutting taxes for small businesses, cutting income taxes and so on.


First off, stop trusting the media. They don't report news or facts, they craft news and propaganda to shape thought.




> This was supposed to stimulate economic growth by giving consumers more purchasing power (which I thought was an Austrian concept, but as I delve into this, it sounds like tax cuts for capitalists, or in other words, consumers of capital goods, do more to stimulate the economy in the long run) but real wages did not increase, Kansas lagged significantly in economic growth behind the country at-large.... why was this?


When taxes are cut, they positively affect people that pay taxes, regardless of whether they are capitalist, socialist or any other political/economic system they subscribe to. Having less of your paycheck taken from you by the government doesn't equal higher wages, it equals more net pay. The better questions is, who will be a better steward of where those dollars are spent, government workers or the person that earned them?

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## Superfluous Man

Tax cuts automatically work, because cutting taxes is an end unto itself.

It makes no difference what happens to the economy.

And if you cut taxes and the economy booms and revenues increase, then that just means you didn't cut them enough. You want revenues to go down, not up.

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## Superfluous Man

> Taxation is theft.


"You must spread some Reputation around before giving it to Origanalist again."

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## loveshiscountry

It wasn't a tax cut, it was tax avoidance. Revenues dropped more than spending. The opposite of austerity.
from 2017

_Between FY 2013 and FY 2014, revenue dropped by $688 million, from $6.341 billion to $5.653 billion ($293 million more than the predicted drop to $5.947 billion). Spending between those years was only cut $152 million, from $6.134 billion to $5.982 billion. These numbers are quite large for a $6 billion general revenue fund. The state delayed a planned cut to the sales tax, weakened the generosity of itemized deductions, and drew down reserves to make ends meet.

However, the total pass-through income reported by those filers did spike, by 11 percent in that time frame. Similarly, Kansas data continues to report significant entity-level growth: the Kansas Secretary of State reports new business filings grew 11 percent between 2012 and 2014, and a further 10 percent through 2016, so new pass-throughs were being set up at a brisk rate under the pass-through carveout policy. It is reasonable to conclude, based on this data and anecdotal evidence, that while few people went from zero income on Schedules C, E, and F to some, Kansans who already reported income on those forms increased how much they were reporting and created new Kansas business entities with the Secretary of State. 

This state has lowered tax rates in some spaces, but the pass-through exemption significantly narrows the tax base, and this has made for a less stable, productive, and competitive code._

https://taxfoundation.org/testimony-...ugh-carve-out/

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## Superfluous Man

> It wasn't a tax cut, it was tax avoidance. Revenues dropped more than spending. The opposite of austerity.
> from 2017
> 
> _Between FY 2013 and FY 2014, revenue dropped by $688 million, from $6.341 billion to $5.653 billion ($293 million more than the predicted drop to $5.947 billion). Spending between those years was only cut $152 million, from $6.134 billion to $5.982 billion. These numbers are quite large for a $6 billion general revenue fund. The state delayed a planned cut to the sales tax, weakened the generosity of itemized deductions, and drew down reserves to make ends meet.
> 
> However, the total pass-through income reported by those filers did spike, by 11 percent in that time frame. Similarly, Kansas data continues to report significant entity-level growth: the Kansas Secretary of State reports new business filings grew 11 percent between 2012 and 2014, and a further 10 percent through 2016, so new pass-throughs were being set up at a brisk rate under the pass-through carveout policy. It is reasonable to conclude, based on this data and anecdotal evidence, that while few people went from zero income on Schedules C, E, and F to some, Kansans who already reported income on those forms increased how much they were reporting and created new Kansas business entities with the Secretary of State. 
> 
> This state has lowered tax rates in some spaces, but the pass-through exemption significantly narrows the tax base, and this has made for a less stable, productive, and competitive code._
> 
> https://taxfoundation.org/testimony-...ugh-carve-out/


That says that spending was still cut. Even if it was cut less than taxes it was still cut.

Ergo, this wasn't merely tax avoidance without genuine cuts. At least if what you quoted was accurate, it was a genuine tax cut, even if its true magnitude was smaller than claimed.

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## NorthCarolinaLiberty

> According to the media,...



This sounds like proof that your thread doesn't work.

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## loveshiscountry

> That says that spending was still cut. Even if it was cut less than taxes it was still cut.
> 
> Ergo, this wasn't merely tax avoidance without genuine cuts. At least if what you quoted was accurate, it was a genuine tax cut, even if its true magnitude was smaller than claimed.


But the biggest impact was the narrowing of the tax base.
Plus spending was cut by 2.5%. No big deal.

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