http://www.wsj.com/articles/seeded-with-tax-cuts-kansas-harvests-the-benefits-1431729743 Unemployment has dropped to 4.2% from 5.5% in 2013, and wages and job growth are steadily climbing. Liberals love to hate Sam Brownback, and for good reason. The Kansas governor threatens a central tenet of liberal orthodoxy: the belief that higher taxes are a price that must be paid for progress. “If your objective is to grow the economy, would you rather put more money into government, or leave it in the hands of small business?” Mr. Brownback asks during a recent interview in his office at the state capitol. Three years ago Kansas enacted the biggest tax cut of any state, relative to the size of its economy, in recent history. Lawmakers reduced the top rate on the personal income tax to 4.9% from 6.45%. They also eliminated the income tax for small business owners who file as individuals, a broad group that includes sole proprietors, limited liability partnerships and S-corporations. The governor declared that Kansas was “open for business” in such strong terms that he might as well have donned a sandwich board reading “Come to Kansas / Keep Everything You Earn.” He boasted: “Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy.” The comment was subsequently picked up by critics who wondered why the Kansas economy wasn’t suddenly leaping ahead at, say, 4%-5% growth annually. When Mr. Brownback ran for re-election last year, national reporters descended on the Sunflower State and quickly made Kansas the national symbol for the alleged depredations of “trickle-down economics.” A sampling of headlines includes: “How Tea Party tax cuts are turning Kansas into a smoking ruin,” L.A. Times, July 9; “Kansas’ Ruinous Tax Cuts,” the New York Times, July 13; and “The Great Kansas Tea Party Disaster,” Rolling Stone, Oct. 23. Yet voters re-elected Mr. Brownback by a four-point margin. What the news coverage missed was that if Kansas hasn’t exactly catapulted into the front ranks in economic growth and employment, then it has at least moved a long way from the stagnation of recent decades. Consider: • In March 2013, unemployment in Kansas stood at 5.5%. It has since dropped to 4.2%, tied for 14th lowest in the country. • From 1998-2012, Kansas ranked 38th in private-sector job growth, according Bureau of Labor Statistics data crunched by the Kansas Policy Institute. In 2013—the first year after the tax reform—the state climbed to 27th place, and in 2014 it moved to 21st, placing it in the top half of states. • In the second half of 2014, hourly wages in Kansas grew 3.5%, according to BLS data, far faster than the national average of 1.9%.
I suppose if you want to ignore the $400 million budget deficit and if you want to cherry pick your stats, then you can prematurely claim victory based on one article. The real situation there isn't as rosy and will probably lead to an increase of sales tax to meet the shortfall, even though it was just recently rejected. Another budget balance technique I read that is being considered is to increase existing tax on health maintenance organizations to allow Kansas to draw on more Federal funds. http://www.washingtontimes.com/news...king-up-bill-to-hike-sales-tax-to-f/?page=all http://www2.ljworld.com/news/2015/apr/25/fact-checking-brownbacks-claims-economy/
Cherry picking. Unemployment decline, job growth up, wages up. Good things to cherry pick. Also this: http://www.forbes.com/sites/rexsinq...x-cuts-making-kansas-a-more-prosperous-state/ State Department of Revenue Secretary, Nick Jordanreported this week that while total March tax receipts were $11.2 million below what was expected, individual income tax receipts were $8.7 million higher than expectation. Jordan stated, “While the monthly receipts show a temporary shortfall, sales and use tax receipts for the fiscal year to date are $40 million more than during first nine months of the prior fiscal year. I’m pleased to see individual income tax receipts $8.7million above what we expected, driven in part by strong employment growth.”
depends on what time periods and what qualifiers you are looking at. Your article makes it sound awesome, mine makes it sound desperate and both numbers are right depending on your perspective.
You really need to look at the before and after. Brownback was reelected even though Democrats were widely panning the tax cuts as a miserable failure. At the time, unemployment was much higher, budget deficit much worse, etc. They were touting the state's performance in relation to neighboring states. All those things are no longer true. It takes a while to undo all the damage done by the previous tax&spend policies. We saw that in the 80s with Reagan's tax cuts - the recession he inherited got worse before it got way better. What's going on in Kansas is similar. It's already showing signs of economy taking off.
Denny, let's revisit this in ten or twenty years. My bet is that at that point, Kansas will still be Kansas. That is, a place with very little economic activity for a fundamental reason. No one wants to live there. Would you move to Kansas, Denny, even if they eliminated all state and local taxes entirely? barfo
Ha! Whether you want to live there or not has little bearing on what is a workable tax policy. I don't want to live there either so I don't, the railroad police ran me out of the state. But that has nothing to do with tax policy either, but both the railroad police (Union) and prior tax policy of the State have much to do with why the Santa Fe railroad went bankrupt, headquartered in that state.
Hmmm...this article tells a completely different story. The Kansas City metropolitan area is ground zero for measuring the impact of Kansas Gov. Sam Brownback’s income tax cuts on job creation. It is an article of faith among Brownback and his supporters that slicing taxes for selected Kansans will convince people and companies to jump the state line and work in Kansas. That crowd includes St. Louis multimillionaire Rex Sinquefield, who wants to eliminate Missouri’s income tax; right-leaning economist Stephen Moore; and Dave Trabert, president of the Kansas Policy Institute, an ultra-conservative think tank. Trabert recently said, “You can observe firsthand businesses that have moved across the state border into Kansas in the Kansas City area.” But is that really happening at a measurable amount? The recent data won’t please Brownback or his allies. In fact, the Kansas side of the metropolitan area has lost its longtime advantage in employment growth over Missouri since the tax cuts took effect in January 2013. Take a look at federal Bureau of Labor Statistics figures, released on a monthly, non-seasonally adjusted basis for the area. (Note: The total workforce on the Missouri side is a bit larger than on the Kansas side.) ▪ In the most recent year, from January 2014 to January 2015, employment on the Missouri side of the state line rose 3.7 percent vs. 2.6 percent on the Kansas side. The Missouri side gained 20,300 jobs in that year while Kansas added only 11,300. This is especially notable because it occurred when — if Brownback’s theory were working — more companies, firms and individuals likely would be expected to take advantage of the tax cuts and roll into Kansas. ▪ In the two years the Brownback tax cuts had been in place from January 2013 to January 2015, employment on the Kansas side was up 4.5 percent, which Missouri nearly matched with job growth of 4.2 percent. That’s only a small advantage for Kansas. And the Missouri side actually added more jobs than the Kansas side did during this time — 23,000 vs. 19,200. ▪ Overall, the Kansas side of the metropolitan area added fewer jobs after the tax cuts took effect than it did during the first two years of Brownback’s term before the cuts were in place. Meanwhile, total employment growth on the Missouri side the last two years has been more than three times higher than its job gains the previous two years. Brownback’s backers can note that, since he took office in January 2011 and through January 2015, employment growth on the Kansas side of the metro area had eclipsed that of Missouri’s, 9.7 percent vs 5.6 percent. However, the more recent figures show the Kansas portion of the metro area has gone from being a big winner in the battle for job gains to a point where it nows lags a surging Missouri. Advocates for lower income taxes argue it will take more time to see whether firms will leave Missouri when their leases are up, for example, or finally decide the costs of moving are worth it. But the takeaway for now is a rebuke to Brownback and his backers. The tax cuts have not spurred magical job growth on the Kansas side of the state line in the last two years. Meanwhile, the cuts have produced huge revenue shortfalls that have gained national negative attention. Funding plans for K-12 schools, higher education, roads and public pensions are embroiled in legislative tugs of war, while higher taxes are on the table to plug the fiscal gaps. With all this turmoil and potential declines in public services in Kansas, the Missouri side of the state line could be looking a lot more attractive to employers and employees. Read more here: http://www.kansascity.com/opinion/editorials/article19411242.html#storylink=cpy
Kansas' minimum wage, which was $2.65 (the lowest in America) for years, was finally raised to $7.25 in 2010. Kentucky exempts any workers covered under the federal FLSA from state labor laws.
http://news.investors.com/ibd-edito...creating-machine-shows-that-tax-cuts-work.htm Where the jobs are really showing up is on the Kansas side of Kansas City. Because tax rates are lower in Kansas than in Missouri, the Kansas side of the metro area produced twice as many jobs as the Missouri side from 2012 to 2014. The Kansas Policy Institute ran the numbers and found that "over the last two years — post-tax reform — private-sector jobs increased by 5.6% on the Kansas side of the metro and only 2.2% on the Missouri side." KPI president Dave Trabert notes: "You can observe firsthand businesses that have moved across the state border into Kansas in the Kansas City area." Wages are also growing in Kansas. Before the tax cut, workers on KC's Kansas side earned 40 cents an hour more than Missouri workers. Now the gap is $3.
You can disagree with Paul Krugman, but he is no fool. In 2008, he was the sole winner of the Nobel Prize in Economics.
The article I just posted refutes that jobs are moving from Missouri, and the wage rise is due to a Federally-forced 300% hike in the minimum wage (which is what most Kansans are being paid. How much will I earn working a minimum wage job in Kansas? A full time minimum wage worker in Kansas working 40 hours a week, 52 weeks a year, will earn $58.00 per day, $290.00 per week, and $15,080.00 per year1. The national poverty line for a family unit consisting of two people is $14,570 per year. What is the Kansas under 18 minimum wage? Kansas employers may pay 18 year olds and minors the youth minimum wage of $4.25 for the first 90 days of employment. Other labor law exemptions for minors in Kansas may exist.
Actually it does. Because the explicit claim is that businesses (and therefore workers) will move to Kansas because of the tax policy. I don't believe that's going to happen. barfo
